OUE fights for majority stake in F&N
Overseas Union Enterprise Group eventually announced the much-awaited bid for Fraser & Neave, the listed Singaporean food and property company, offering S$9.08 for each share.
The offer is lower than the closing price of F&N at S$9.13 yesterday, but higher than the S$8.88 price offered by Thai tycoon Charoen Sirivadhanabhakdi’s TCC Assets Co Ltd. Probably as investors expect Charoen to fight, F&N share price today opened higher at S$9.26 before ending the morning session at S$9.33.
As of Nov 8, TCC Assets and its group held 484.46 million F&N shares, representing approximately 33.6 per cent. OUE said in the statement filed to the Singapore Exchange at 9pm last night that it aimed to accumulate over 50 per cent in F&N. In the statement, it also announced that Kirin Holdings which holds a 15 per cent stake in F&N also agreed to sell 212.77 million shares or 14.8 per cent for S$2.7 billion.
Should Charoen decide to fight, he will have to raise the bid. Or should he back off, he could fetch a total of S$4.4 billion. Given the fact that TCC accumulated the shares when they were traded below S$8 apiece, Charoen could reap an immediate gain of S$1 per share or about S$500 million (approximately Bt12 billion).
"Upon completion of the APBL (Asa Pacific Breweries) disposal and the divestment of the F&B Business, F&N will become primarily a property player. The Offeror views F&N as one of the leading integrated property companies in Singapore with a strong track record of success and a highly attractive property portfolio, which is complementary to OUE's existing property
portfolio. Combining both portfolios will further establish OUE as a leading property player in Singapore and expand OUE's footprint in Singapore and regionally," the company said in the tender offer document.
Advising OUE are Credit Suisse (Singapore), Merrill Lynch (Singapore) and CIMB Bank.
OUE Baytown was established in Singapore as a special purpose vehicle, to take over F&N.
OUE Baytown is a wholly-owned subsidiary of Arbon, a company incorporated in Singapore, which is in turn wholly-owned by Arbon Holdings Ltd (Arbon Holdings), a company incorporated in the Cayman Islands of which is half owned by OUE and Orange Circle Investments Ltd (OCI).
The OUE Led Consortium comprises OUE, certain investment funds and accounts managed by Farallon Capital Management LLC and and Noonday Global Management Ltd and other investors and is led by OUE.
OUE made a $1.1 billion bid in October for F&N's serviced-apartment business and has said it's considering options that include an offer for the Singaporean company's shares.
OUE, which gets about 65 percent of its revenue from hotel operations, is planning at least one investment a year in Singapore to boost property holdings that include office towers, luxury apartments and malls, Stephen Riady, the company's chairman, said in an interview to Bloomberg in August.OUE is seeking to almost double the assets of its Singapore
unit to S$10 billion in as little as three years, Riady said.