Jan 3, 2013

Singapore - Fifth extension for Charoen's F&N offer

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Thai tycoon Charoen Sirivadhanabhakdi has yet again extended the deadline for his general offer for beverage and property conglomerate Fraser and Neave.

Charoen's investment vehicle TCC Assets said yesterday the unchanged S$8.88 per share offer will run till January 10 - the fifth extension to the offer. Yesterday's deadline was the culmination of four earlier extensions.

All eyes will now be on the consortium led by property firm Overseas Union Enterprise (OUE) which has countered with a higher S$9.08 a share or a total of S$13.1 billion. OUE's offer lapses today with market players also expecting an extension on its part.

The market has pushed F&N's share price well above both bids. The counter slipped three cents to S$9.67 yesterday.

The numerous extensions from Charoen have injected some uncertainty into the process, and traders may face a longer wait before the parties unveil higher bids - if they do.

OUE's offer document went out on December 6 last year and the offer can run for a maximum of 60 days, according to Singapore's takeover rules. This gives it until February 4 to work with, but it will need to leave any offer open for at least 14 days if it revises a bid. This means it has until January 21 to revise the bid.

Reuters yesterday quoted an unnamed source as saying that OUE is expected to extend its offer to as long as the fourth week of this month. Further extensions are possible if the Securities Industry Council (SIC) agrees, The Straits Times understands.

Charoen needs the SIC's permission to extend the offer any further from the January 10 he has been given as his initial maximum offer period has expired.

The Thai tycoon is widely seen as having the upper hand, as his parties have more than 34 per cent of F&N, including acceptances. OUE has less than 15 per cent, including the acceptance from Kirin Holdings, which had agreed to tender its 14.8 per cent F&N stake to it. Kirin also agreed to buy F&N's food and beverage business for S$2.7 billion if the OUE offer is successful.

JP Morgan, the independent financial adviser (IFA) to F&N's independent directors, on Monday deemed Kirin's offer for F&N's food and beverage unit to be "fair but not reasonable".

OUE is bound to vote in favour of the sale of the unit to Kirin only if the offer is deemed "fair and reasonable".

"(Mr Charoen) is probably waiting for OUE's move," said DMG & Partners analyst Goh Han Peng.

Corporate lawyer Robson Lee expects OUE to extend its offer today if it cannot secure enough acceptances to make it unconditional. "In this case it could be envisaged that Kirin could revise its offer for the food and beverage business to secure a more favourable opinion from the IFA."

Jonathan Kwok

The Straits Times

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