F&N is gone...
DJ Fraser & Neave Board Says Thai Tycoon's Revised Bid Fair
Dow Jones Newswires | 27 Jan 2013 10:26am
By P.R. Venkat
SINGAPORE--Thai tycoon Charoen Sirivadhanabhakdi Sunday got a fillip in his bid to gain control of Fraser & Neave Ltd. (F99.SG) after the board of the Singapore conglomerate said the revised US$6.68 billion offer by the billionaire was "fair" and that they don't see a competing offer emerging.
Agreeing to its independent financial advisor J.P. Morgan Chase & Co.'s recommendation, Fraser & Neave board said that independent directors of the company including its chairman Lee Hsien Yang has decided to accept Mr. Charoen's offer.
Fraser & Neave hit headlines in July last year, when Mr. Charoen first bought shares in the Singapore firm that prompted Dutch brewer Heineken NV to buy out its 81-year-old beer-brewing joint venture with Fraser & Neave for US$4.6 billion in September and put the rest of the conglomerate's assets, the property and soft drinks business, in play.
Mr. Charoen, through his unlisted vehicle TCC Assets, made his first bid for the whole of Fraser & Neave in September, offering S$8.88 ($7.22) a share or US$7.2 billion to buy the shares he didn't already own. But that offer was turned down by the board of Fraser & Neave, which said the offer wasn't "compelling."
The battle for Fraser & Neave, one of southeast Asia's most sought-after assets, intensified when Overseas Union Enterprise (LJ3.SG), a property company owned by a wealthy Indonesia Riady family, made a US$10.6 billion offer in November. Overseas Union was backed by Japanese brewer Kirin Holdings Co. -- Fraser & Neave's second-largest shareholder with a 14.8% stake.
Even the Overseas Union offer got a tepid response from Fraser & Neave board.
The prospect of a bidding war propelled Fraser & Neave's share price to record highs, with both bidders spending months extending offers that prompted the Singapore regulator--Securities Industry Council--to step in and direct both parties to come up with revised offers or face an auction.
On Jan. 18, Mr. Charoen, who now owns 44.05% of the company, came up with a revised S$9.55 a share offer valuing Fraser & Neave at US$11.2 billion. Overseas Union didn't raise its bid, saying a successful takeover of Fraser & Neave would come at an unattractive cost for the company.
In its letter to shareholders Sunday, the independent directors said that J.P. Morgan -- which had been appointed by Fraser & Neave to evaluate the bids -- has recommended that the revised offer price by TCC Assets falls within the investment bank's valuation of S$8.58 to S$11.68 a share.
Fraser & Neave independent directors in their note to shareholders also said that they believe that the current market price of Fraser & Neave may decrease and "that a higher competing offer will not be made."
Write to P.R. Venkat at venkat.pr@wsj.com
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