Heineken in pole position for Asia Pacific Breweries21 August 2012
Heineken appears to be winning the battle for Tiger Brewer Asia Pacific Breweries after the latest dramatic twist saw Fraser & Neave recommend an improved S$5.4 billion (US$4.3 billion) deal.
The S$53 per share deal for Fraser & Neave’s 39.7% stake edges the complex saga to a conclusion after Heineken had previously been frustrated by ThaiBev-affiliated company Kindest Place Group’s offer of S$55 per share for a separate 7.3% stake. Heineken previously tabled an offer of S$50 per share.
Fraser & Neave’s board faced the dilemma of whether to accept Heineken’s deal or Kindest Place Group’s slightly higher offer for a smaller stake. The Singapore-based firm has now decided to back Heineken’s latest proposal after previously recommending the Dutch brewing giant’s initial offer.
“The sale of F&N’s stakes in APB in its entirety to Heineken at the improved price would better maximise overall returns for F&N shareholders,” said Lee Hsien Yang, Fraser & Neave’s chair.
"Our Asian headquarters will continue to be based in Singapore, and we remain 100% committed to the growth and success of APB and the Tiger brand," added Jean-François van Boxmeer, Heineken’s chief executive.
Heineken will be pleased to near a conclusion to the battle as Asian beer sales continue to rise and European markets stagnate.
If the deal is concluded, Heineken will acquire an 81.6% stake in Asia Pacific Breweries which would trigger an automatic S$2.5 billion takeover for the remaining shares.
The brewer still faces a shareholder vote in late November/early December which could be complicated by the fact that ThaiBev is Fraser & Neave’s largest shareholder with a 26.4% stake. Japanese brewer Kirin holds 15% and insurer Prudential is the third largest shareholder.
However, the fee agreed with Heineken represents a 3500% premium on Asia Pacific Breweries’ average share price over the last 12 months.
The Dutch brewer said it expects the transaction to be concluded by 15 December. Fraser & Neave has agreed to pay Heineken a S$56m break fee if Fraser & Neave shareholders reject the offer and a deal is not concluded within 120 days.
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