05 September 2012

F&N sales of APB stake to be decided soon

Update on F&N sales of APB stake. Source: REUTERS
Who will be the winner in this? F&B? APB? Heineken? or Thai Beverages? What I think was that, APB shareholders (including F&N and Thai Beverages indirectly) are the biggest winners, as they would enjoy the offer of S$53 per shares from Heineken if they agreed it during EGM. Thai Beverages are not very good in beer  business in Thailand as they still suffered losses on year 2011. I think their intention is to control the APB business to grow their beer business in Asean region. Nonetheless, we would know the result soon and hopefully we will have a happy ending here.
Below are the breakdown of Thai Beverages business segment for year 2011.
Sales Volume. Source: Company Annual Report 2011
SINGAPORE - Fraser and Neave Ltd said it will put out a circular on Thursday to lay out details of the proposed stake sale in its crown jewel, Asia Pacific Breweries Ltd, to Heineken and set the date for a crucial shareholders' meeting.

A source with knowledge of the matter said an extraordinary general meeting, where shareholders will vote on the future of the Singapore drinks and property conglomerate, may take place in late September - earlier than previously expected.

The F&N board has proposed a S$4 billion (US$3.2 billion) payout to shareholders if they approve the sale of APB, which brews Tiger and other brands of beer, to Heineken. Some analysts said that payout could sway minority shareholders in favour of the deal.

The conglomerate would cancel one of every three shares held by all shareholders and pay out S$8.50 for each share cancelled.

F&N has been at the centre of a fight over APB between Heineken, the world's third-biggest brewer, and Thai Beverage PCL, controlled by billionaire Charoen Sirivadhanabhakdi.

At stake is a company that runs 30 breweries in 14 countries - including Singapore, Indonesia, Malaysia and Thailand - and owns a portfolio of beer brands that are popular in Asia's fast-growing drinks market.

Heineken has bid S$5.6 billion (US$4.5 billion) for F&N's roughly 40 per cent stake in APB. F&N's board approved the Dutch brewer's S$53 per share bid but must win backing from shareholders that include ThaiBev and Japan's Kirin Holdings .

Heineken has also been building up its stake in APB through purchases in the open market. As of September 4, Heineken had a 13.71 per cent direct interest in APB, according to a stock market filing.

ThaiBev has spent S$3.6 billion to buy 29 per cent of F&N, partly funded by a S$2.8 billion loan facility. If its holding hits 30 per cent, ThaiBev would be obliged to bid for all of F&N, although analysts question its financial ability to do so. - REUTERS

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