Fraser & Neave (F & N)

[KopiKat]

A summary of events from Lim & Tan,
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Nor Khun Charoen rejecting Thai Bev’s offer to buy F&N shares from OCBC / GE at Thai Bev’s EGM (ie risk to OCBC / GE’s share price).
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Mr Charoen has already pledged to vote in favour of the proposed acquisition!
para 4.2(b) of http://info.sgx.com/webcoranncatth.nsf/V...F004D58D2/$file/Proposed_Investment.pdf?openelement

That was before Heineken came along with the offer for F&N's APB stake (via their JV co.). I wonder if ThaiBev will apply for a court injunction (if it's allowable) to stop F&N, since they are most likely eyeing 'Tiger Beer'??

[freedom]

If it was APB Thaibev solely focuses on, it would buy APB from OCBC & GE instead of Kindest Places.

APB is a prize asset within F & N, but the rest of business of F & N is not bad, either.

[swakoo]

That was before Heineken came along with the offer for F&N's APB stake (via their JV co.).

According to para 4.1 c ii of http://info.sgx.com/webcoranncatth.nsf/V...penelement the deal will unscramble if APB is delisted, which can happen if Heineken's ownership takes it over the threshold. In which case OCBC/GE gets to enjoy the $50 bid for APB?

[KopiKat]

That was before Heineken came along with the offer for F&N's APB stake (via their JV co.).

According to para 4.1 c ii of http://info.sgx.com/webcoranncatth.nsf/V...penelement the deal will unscramble if APB is delisted, which can happen if Heineken's ownership takes it over the threshold. In which case OCBC/GE gets to enjoy the $50 bid for APB?

Woah.. potential facing-saving for OCBC/GE??

[swakoo]

A summary of events from Lim & Tan,

Alternative views by analysts on the Heineken bid for APB cited by Bloomberg: Heineken Lack of Asia Options Seen Forcing Bump: Real M&A

Heineken NV (HEIA) may need to raise a $6 billion offer for the rest of Asia Pacific Breweries Ltd. (APB), its main distributor in the region, to win over the Dutch company’s local venture partners.

“It’s in Heineken’s interest to pay,” Richard O’Donovan, a Dublin-based analyst at Davy Research, said in a telephone interview. “They could go a little bit higher. There are very few assets that Heineken can go after, and this is one where they’ve had a long relationship which has been quite successful. They’ve left themselves with nothing of significance in Asia unless they follow through with this deal.”
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While data compiled by Bloomberg show the bid is already the most expensive relative to earnings of any Asian brewery takeover greater than $1 billion, UBS AG says Heineken may need to boost the price as much as 30 percent to persuade ThaiBev and Kirin to part with APB.
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Heineken’s offer of S$50 a share for the 58 percent of APB it doesn’t already own values the company at about 17 times earnings before interest, taxes, depreciation and amortization, data compiled by Bloomberg show. That’s the most paid in a takeover of an Asian brewer worth more than $1 billion, and the highest price globally since Heineken and Carlsberg A/S offered 23 times Ebitda in a 9.5 billion-pound ($15 billion) takeover of Scottish & Newcastle Ltd. in 2008, the data show.
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“Concerns over the prospect of having two competing brewers having significant influence in F&N is likely to have prompted Heineken to attempt to address the situation once and for all,” Gregory Lui, an analyst in Singapore with Deutsche Bank, wrote in a July 23 note. “Heineken raising its offer cannot be ruled out given Heineken’s balance sheet capacity.”

Heineken, the world’s third-largest brewer, needs F&N’s board to recommend the deal to its shareholders and for those investors to vote in favor of the transaction, the company said in a July 20 statement. Failing that, Heineken said it “will review all options available to protect its commercial interests.”
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“It’s probably not their best offer they put on the table in the first place,” Olivier Nicolai, a London-based analyst at UBS, said in a phone interview. “If Heineken wants control, they will have to raise it for sure.”

By raising the offer as high as S$65 a share, or 25 percent more than yesterday’s closing price, Heineken would still keep its net debt at less than four times Ebitda, a threshold regarded as “the covenant in the beer industry,” according to Nicolai. Heineken had 813 million euros ($988 million) in cash as of December and net debt at 2.53 times Ebitda, the data show.

Yesterday, APB shares, which had earlier traded within 50 cents of Heineken’s S$50 offer, surpassed that level in the final eight minutes of trading. The surge, which left APB at S$52, reflects speculation that a higher bid may be possible, Andrew Holland, an analyst at Societe Generale, said in a phone interview from London.
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“Fraser & Neave is in quite a powerful position,” he said. “They don’t have to sell. They can go to Heineken and say, ‘We’re interested in principle in your offer, but you need to offer more money.”
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Heineken, which also owns a stake in India’s United Breweries Ltd. (UBBL), said Asia accounted for 6.5 percent of operating income last year. It describes APB as “underpinning our position in the region.”
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“In Asia-Pac at this stage, this is Heineken’s business,” said O’Donovan of Davy Research. “They’ve had it for a long time, so they’re not going to be willing to give it up lightly.”

[KopiKat]

We'll know tomorrow as F&N BOD is going to decide by then (?)
Meanwhile, ThaiBev is collecting F&N shares...SGX Annc

From 22 % To 23.9 %

Note : ThaiBev is already treating the 22% from OCBC and GEH as a deemed interest...

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Time extended by 1 week from today (27-Jul),

SGX Annc

[Temperament]

i remember i bought "FNN" around $6 when the market crashed. i think more then 20 years ago. A lot of people crowd at entrance of DBS Bank at DBS building at Shenton way. We had to tell (more like yelling at) our assigned brokers what we wanted to buy. There were no internet then. You couldn't get your broker on the phone. Therefore you got a frenzy crowd like buying "lelong goods" at DBS BANK's Brokerage. Those were the "crazy days".

Just a few months before this take-over saga happens, i told my brother-in-law (tongue in the cheek ) that FNN was one of the first blue chip i bought at $6, 20 years ago. And now was selling between $5-$6. i think FNN was under valued by the market, now. True enough before i am willing to buy at this price, the market has reacted. You see just from experience of 20 years investing "my instinct" tell me FNN is under valued at 5-6 $ price.
Actually i had B/S FNN a few times already through the years. This time i talked only but not willing to buy at above $5. i admit my mistakes after the fact is known. That's the problem based on "gut's feeling only & experience". But then how many value investors here really know FNN was under valued at $5 - $6 at this time.

[swakoo]

Price action to recent bids:

The targets
- F&N and APB up (obviously)

The bidders
- Heineken slightly up ($50 bid for APB received positively)
- Thai Bev <green line> down slightly (bid for F&N not so well received)

[Image: z?s=F99.SI&t=1m&q=l&l=off&z=l&c=Y92.SI,H...&region=US]

[KopiKat]

Price action to recent bids:

The targets
- F&N and APB up (obviously)

The bidders
- Heineken slightly up ($50 bid for APB received positively)
- Thai Bev <green line> down slightly (bid for F&N not so well received)

Nice chart! Can also add in the 2 Eager Sellers (OCBC + GEH) and the F&N babies (FCT + FCOT)? But may end up looking very cluttered and messy!

[swakoo]

Nice chart! Can also add in the 2 Eager Sellers (OCBC + GEH) and the F&N babies (FCT + FCOT)? But may end up looking very cluttered and messy!

Your wish is my command..

Price action to recent bids:

The targets
- F&N and APB up (obviously)

The bidders
- Heineken slightly up ($50 bid for APB received positively => means bid not high enough yet?
- Thai Bev (y92.si) down slightly (bid for F&N not so well received)

The eager sellers
- OCBC (o39.si) and GEH (g07.si) up (obviously)

The F&N babies
- FCT (j69u.si) and FCOT (kt8u.si) up (probably on their own steam)

[Image: z?s=F99.SI&t=1m&q=l&l=off&z=l&c=A46.SI,H...&region=US]

Note: yahoo finance data may not be fully accurate