ThaiBev ups stake in F&N to challenge Heineken bid29 August 2012
The tussle for Asia Pacific Pacific Breweries took another twist yesterday (28 August) as ThaiBev increased its stake in Fraser & Neave to just under the level that would trigger a mandatory offer for the Singapore-based conglomerate.
ThaiBev has bought a further 2.6% of Fraser & Neave for S$316 million ($252 million) to up its stake to 29% - just below the 30% threshold which would force ThaiBev to make an offer for the rest of the business. To date, the firm has spent a total of S$3.6 billion on Fraser & Neave shares.
Heineken had looked to be edging towards winning the six week battle for the brewing joint venture after Fraser & Neave's board backed its S$7.4 billion offer. The Dutch brewer had faced competition from the ThaiBev-affiliated firm Happiest Place Group.
The latest move by ThaiBev will be interpreted as an attempt to block Heineken's acquisition of the Tiger beer brewer, which had been expected to close by November.
Unless ThaiBev buys Fraser & Neave - a move which several analysts say would be a stretch its finances - the firm's best chance of preventing Heineken from taken control of Asia Pacific Breweries will be to increase its stake and persuade other shareholders to reject the deal. Fraser & Neave's third largest shareholder is Japan's Kirin Holdings which has a share of just under15%.
"ThaiBev doesn't have the desire to buy the whole of Fraser & Neave. If they want to block Heineken's bid for Asia Pacific Breweries, they need to win over Kirin and some other institutional shareholders to get the 51% majority," a banking source told Reuters.
ThaiBev did not comment on its strategy but some analysts have tipped minority shareholders to be swayed by Fraser & Neave's proposal to pay a S$4 billion dividend to shareholders through a capital reduction.
A shareholder meeting to consider Heineken's offer is expected in October but no date has been confirmed.
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