Dutch brewer Heineken NV seems to have taken a leaf out of Thai
billionaire Charoen Sirivadhanabhakdi’s books when it bought a mere 1.4% stake
in its takeover target company Asia Pacific Breweries from Singapore state
investment company Temasek Holdings Pte. Ltd. on Tuesday.
Although the acquisition of
Temasek’s stake may seem quite small compared to the huge amount Heineken is
shelling out to take control of APB, that small purchase could turn out to be a
strategic move by the Dutch brewer in its quest to cover all its bases —
including providing for the possibility of taking the maker of Tiger beer
private.
Over the weekend, Heineken raised
its offer for APB, a joint venture between the Dutch brewer and Singapore
conglomerate Fraser & Neave Ltd., offering S$53 a share for the whole of
F&N’s 39.7% direct and indirect stake in APB. Taking full control of APB
will cost Heineken $6.3 billion as the Dutch plans to make a general offer and
take the company private once shareholders of Fraser & Neave approve the
offer.
F&N’s board has approved
Heineken’s offer and said it won’t accept any other offers for APB.
Heineken now has an 84.24% stake
in APB, which includes 39.7% F&N’s direct and indirect stake which needs to
be approved by F&N shareholders and another 2.68 million shares it bought
from Temasek and open market transactions. Had Kindest Place bought Temasek’s 1.4%
stake, it would have given the Thai company around 10% control of APB, that
could have potentially complicated the Dutch’s plans to delist APB. What is now
up for grabs is a 7.16% stake held by several minority investors.
Heineken would now need acceptances
of more than 90% of direct shares it doesn’t own pre-offer to take APB private.
Heineken may have spent many
sleepless nights when Mr. Charoen’s Thai Beverage PCL and his son-in-law’s
company Kindest Place Group began building up their stakes after initially
buying a 22% and 8.6% stake in F&N and APB respectively last month from
Singapore’s Oversea-Chinese Banking Corp. and its associates. Since then, Mr.
Charoen has been slowly building up his stake in F&N through open market
purchases and is now the largest shareholder in the Singaporean conglomerate
with a 26.4% stake. Kindest Place, on the other hand, made an offer of S$55 a
share to buy F&N’s direct 7.3% stake in APB, which pushed Heineken to up
its offer for whole of APB to S$53 a share from S$50.
Heineken said Wednesday that it
has acquired 2.68 million shares in APB via “open market purchases and married
deal” Tuesday at S$53 a share costing $292 million. This will take Heineken’s
direct and indirect stake in APB to about 44.6% and is aimed at ensuring that
they are able to move ahead with their plans to take the company private if the
F&N shareholders agree to Heineken’s offer for APB.
P.R. Venkat
Business & Investment Opportunities
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