Property group Overseas Union Enterprise (OUE) has vowed to make its
intentions clear over possible takeover target Fraser & Neave (F&N) by
next Thursday.
OUE said yesterday that it will
either announce its firm intention to bid for F&N or rule out such a bid by
the deadline.
It made the statement after talks
with the Securities Industry Council.
After weeks of high drama, the
multi-billion dollar tussle for F&N had taken a fresh twist on October 19,
when OUE flagged its possible interest in the conglomerate.
But there has been radio silence
from OUE since then, leaving investors with little clarity.
An existing general takeover
offer by Thai tycoon Charoen Sirivadhanabhakdi of S$8.88 per share, which
values F&N at S$12.8 billion, is due to close today.
But investors faced with the
uncertainty of whether to accept Charoen's offer could have more time to weigh
up the prospects of a better offer, said observers.
"Mr Charoen will likely
extend his offer again, as he hasn't gained control of F&N," said DMG
& Partners analyst Goh Han Peng. "Logically, any extension will give
him more time to (look out for) the action of the other party."
F&N's stock has been trading
above Charoen's S$8.88 offer, with market players betting that an OUE offer
will eventually materialise.
Yesterday, F&N jumped in the
last hour of trade after OUE called a trading halt. Traders were anticipating
news of an official F&N offer at last, only to be greeted with the deadline
announcement.
F&N's shares rose six cents
to S$9.15 for the day.
In its stock exchange
announcement, OUE added that it has appointed Credit Suisse and Merrill Lynch
to advise it.
The firm will wait for their
recommendations before making a decision on a possible F&N offer.
Charoen's offer had already been
extended from October 29 to today.
Goh said that a further extension
will give F&N shareholders more time to consider and to see if OUE puts out
an offer.
"If there is no offer, they
can still accept the Thai offer," he said.
Charoen is the largest
shareholder of F&N: his parties own more than 35 per cent. Japanese brewer
Kirin Holdings is No. 2, at almost 15 per cent.
OUE also said yesterday that its
third-quarter net profit rose 20.5 per cent to S$23.9 million, owing to higher
contributions by the hospitality, property investment and property development
divisions. Revenue for the three months to September 30 was up 18.2 per cent to
S$102 million.
The property investments arm
benefited from rental contributions from OUE Bayfront, where occupancy rates
had increased year on year, and a one-off penalty rent received in relation to
another commercial building.
The hospitality division had a
full quarter of contributions from Crowne Plaza Changi Airport, which was
acquired in July last year. And the property development arm continued to sell
more units at the Twin Peaks condominium project.
Earnings per share were three
cents, from two cents a year ago. Net asset value per share was S$3.43 at
September 30, from a restated S$3.47 at the end of last year.
Before the trading halt and
announcements, OUE's shares gained two cents to S$2.71.
US$ = S$1.22
Jonathan Kwok
Business & Investment Opportunities
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