August 19, 2012 00:00
By Achara Deboonme
Heineken has added spice into the battle for the control of Asia Pacific Breweries (APB) with the "final" offer of $53 per APB share held directly and indirectly by Fraser & Neave (F&N).
In a statement released at the evening of August 17, Heineken said that it also signed definitive agreements with F&N, which bind the latter of irrevocable recommendation to shareholders for the share sale and the extraordinary shareholder meeting to consider the transaction within a pre-defined timetable.
“I am pleased that F&N’s Board has agreed that our increased offer, which is now final, represents excellent value for F&N and APB shareholders. I would like to thank Chairman Lee for the role he has played in securing this important agreement. Our Asian headquarters will continue to be based in Singapore, and we remain 100 per cent committed to the growth and success of APB and the Tiger brand, just as we have been for the last 81 years," said Heineken Executive Chairman and Chief Executive Officer Jean-François van Boxmeer.
The offer would raise the value of transaction with F&N to 5.4 billion Singapore dollar and S$163 million for F&N's interest in the non-APB assets held by Asia Pacific International Private (APIPL).
The total cash value at S$5.6 billion shows an increase of S$307 million from the previous offer, announced before Thailand's tycoon Charoen Sirivadhanabhakdi made a move to take a bigger stake in APB, the brewer of Tiger and Anchor beer, among others.
Kindest Group Places, owned by Charoen's son-in-law, two weeks ago offered to buy another 7 per cent in APB for the price of S$55 per share, which was 10 per cent higher than Heineken's previous offer made on July 20. If able to buy additional shares, Kindest Place will hold 15 per cent in APB, the move which will challenge Heineken as Charoen also owns a majority stake in Thai Beverage Plc, the Thai brewer of Chang beer.
Kindest Place's move raised speculation that it forced Heineken to offer a higher bid, to fend off ThaiBev's influence in APB, which has been a major marketing arm in Asia Pacific for the Dutch brewer in the past 80 years. The bid was raised though Heineken was previously convinced that its offer for F&N was better: though its offer was lower than Kindest Place's, it covered all shares held by F&N - not just the 7 per cent portion.
Heineken said in the statement that it will not further raise the bid, and "believes that it provides compelling value to both F&N and APB shareholders.The Final Offer represents a premium of 54 per cent over the one-month volume weighted average price per APB share¹ and a P/E multiple of 35.1 times for the last twelve months ending June 30, 2012."
If it succeeds, Heineken Group will hold an 81.6 per cent stake in APB and gain control of APB's business. It will then make a mandatory general offer in accordance with the Singapore Code on Take-overs and Mergers, for all the shares of APB that the Heineken group does not already own. If all such shares were tendered, the total cash consideration for the MGO would be S$2.5 billion.
Stock analysts believed that Charoen's group stands to win through the acquisition of a 26 per cent stake in F&N and another 8 per cent in APB. Without control in APB, it could still benefit from F&N's extensive regional business network as well as reap a financial gain as Heineken raised the bid.
A source from ThaiBev earlier insisted that the group really wanted to establish partnership with F&N and APB, as a shortcut for its regional expansion.
It was reported that ThaiBev has been in talks with several Thai banks for the financing.
Siam Commercial Bank President Kannikar Chalitaporn however said last week that her bank has not been approached by the group.