A consortium led by Overseas Union Enterprise Ltd (OUE) today backed out of a bidding war with Thai billionaire Charoen Sirivadhanabhakdi for takeover of Singapore-based conglomerate Fraser and Neave Ltd (F&N), saying it was not willing to raise its offer price.
OUE, controlled by Lippo Group and run by Indonesian tycoon Stephen Riady, said in a statement to the Singapore Stock Exchange, ''In order to secure the more than 50 per cent acceptances for the offer to become unconditional, the offerer would need to significantly increase the offer price to a level which is no longer as attractive to OUE.''
By backing out, Sirivadhanabhakdi's offer of $9.55 a share is the only one left on the table and is likely to succeed.
Late last week, Sirivadhanabhakdi through his companies Thai Beverage and TCC Assets, which hold 33.6 per cent stake in F&N, sweetened his September 2012 bid to S$9.55 per share, trumping a S$9.08 rival bid from OUE.
The sweetened offer, which valued the property and drinks conglomerate at nearly S$13.8 billion ($11.3 billion), trumped a S$13.1 billion ($10.7 billion) offer from OUE.
Japanese brewer Kirin Holdings, Asia's largest beverage company, which holds a 14.8 per cent stake in F&N, had backed OUE's offer, and said that it will tender its stake for S$1.9 billion ($1.6 billion). If OUE's bid was successful, Kirin had planned to buy back F&N's food and beverage operations for about S$2.7 billion.
Although F&N's board had not recommended OUE's counter-bid to shareholders, it had agreed to pay a break fee of as much as S$50 million, an indication that it preferred OUE's superior offer.
An independent adviser hired by F&N had found Sirivadhanabhakdi's offer fair but ''not compelling. The adviser estimates that the value of the company, which has businesses ranging from soft drinks to shopping malls to serviced apartments, should be between S$8.30 and S$11.22 a share.
Charoen had extended his earlier offer seven times, while OUE extended twice. The several extensions without a binding offer made Singapore's Securities Industry Council last week rule that if neither party declares its offer final by 20 January, an auction will kick off on 21 January.
The fight for F&N centered on its property portfolio, which is estimated to be worth more than S$8 billion, and generated around 30 per cent of its 2011 revenue of S$6.3 billion.
F&N has a global portfolio of quality residential properties, serviced residences, real estate and fund management, and commercial properties, which include retail malls, offices and business parks.
The company has developed over 40 residential projects and built over 11,000 quality homes in Singapore and over 20 residential projects in China, Thailand, Vietnam, the UK, Australia and New Zealand.
It owns and/or manages 12 retail malls, 10 office towers and 2 business parks and a logistic park. It is one of the leading international branded serviced apartment operators, managing over 12,200 serviced residence units in 39 key cities, including London, Paris, Tokyo, Hong Kong, Shanghai, Beijing, Nanjing, Shenzhen, Seoul, Manila, Bangkok, Hanoi, Singapore, Sydney, and Dubai.
Sirivadhanabhakdi holds vast assets, including hotels Bangkok, Kobe, Hanoi, Singapore and New York, and beverage business of fruit juices and bottled water, both of which will compliment F&N's property and non-beer beverages portfolio.
F&N had, in October 2012, agreed to sell its 39.7 per cent stake in Tiger beer maker Asia Pacific Breweries (APB) to its joint venture partner Dutch brewer Heineken for $4.6 billion. (See: Dutch brewer Heineken finally wins control of Tiger beer maker APB)
Heineken, which held a 42-per cent stake in APB, won control of the company after a protracted bidding war with Sirivadhanabhakdi.