Thai billionaire on verge to win takeover battle over F&N
The Overseas Union Enterprise (OUE) consortium gave up the fight for Fraser and Neave (F&N) yesterday, leaving the path open for Thai tycoon Charoen Sirivadhanabhakdi to seize the prize.
Charoen forced OUE's hand with a bold stroke on Friday night that involved raising his offer from S$8.88 per F&N share to S$9.55. That move came as he executed a rapid series of trades on Friday and Saturday that lifted his F&N holding to over 40 per cent, a stake the OUE group probably thought was unassailable.
All eyes are now on how many shareholders accept Charoen's offer. A complete acquisition of F&N - valued at S$13.75 billion at the latest bid - would mark the largest takeover in Singapore corporate history.
"I guess this is the end; there's now finality and market certainty," said corporate lawyer Robson Lee.
The drawn-out takeover battle began last July when Charoen's parties bought stakes in F&N and Asia Pacific Breweries (APB). His initial S$8.88 per share general offer for F&N was launched in September, with OUE announcing a S$9.08 per share counterbid in November.
The deadlock had dragged on for so long that the Securities Industry Council announced an auction system to break the impasse.
This started yesterday after Charoen had already made his aggressive new S$9.55 offer.
The ball was in OUE's court but it was seemingly deterred by Charoen's move and failed to raise its S$9.08 offer, meaning the auction was over in a day. Since its earlier acceptances fell well short of the 50 per cent thres-hold, OUE's offer failed and investors who had tendered stock to it will have the shares returned.
OUE pulled out basically because it would cost too much to top Charoen, given that it was building up its stake from almost zero. It said in a statement yesterday: "In order to secure the more than 50 per cent acceptances for the offer to become unconditional, (the OUE consortium) would need to significantly increase the offer price to a level which is no longer as attractive to OUE."
OUE also said the potential impact of recent measures to cool the property market made F&N, a beverage giant with large property operations, less attractive at a higher price.
OUE said that its bid, despite failing, "enabled F&N shareholders to increase the value of their investment", citing the higher offer TCC Assets, Charoen's investment vehicle, made on Friday. F&N's value increased by almost S$1 billion when TCC Assets raised its offer from S$8.88 to S$9.55, said OUE.