Thai tycoon Charoen Sirivadhanabhakdi has again extended the deadline
for his takeover offer for Fraser & Neave (F&N), presumably due to low
acceptances and a possible counter-bid from a Singapore property firm.
The offer of S$8.88 a share was
to have closed yesterday - itself an extension from the original October 29
deadline - but will now run until November 22.
The announcement of the new
deadline comes just a day after potential rival Overseas Union Enterprise (OUE)
promised to make its intentions clear over F&N by November 15.
OUE, which flagged its interest
in F&N last month, will either announce a firm intention to bid or rule one
out by this date.
Charoen's extension - which was
announced by his investment vehicle TCC Assets - now places the close of his
offer one week after the deadline for the OUE decision.
"The extension is good for
shareholders as they can wait for OUE's decision on November 15 before deciding
whether to accept Mr Charoen's offer," said DMG & Partners analyst Goh
Han Peng.
The extension is also logical for
Charoen, who is unlikely to be satisfied with his F&N holdings.
His vehicles - TCC Assets and
Chang Beer brewer Thai Beverage - have almost 34 per cent of the conglomerate.
This comes from the initial
purchase of stock from OCBC Bank, Great Eastern Holdings and Lee Rubber Company
in July, plus further buying from large investors and on the open market.
TCC Assets said last night that
it has received acceptances from shareholders owning an additional 2.77 per
cent of F&N.
This could bring the stake to
over 36 per cent if these transfers go through.
The acceptance figure has not
risen much in recent weeks as F&N's stock price has shot up above Charoen's
S$8.88 per share bid on anticipation that OUE would make a better offer.
F&N stock dropped five cents
to S$9.10 yesterday but sellers would still get more money off- loading their
shares on the stock market than from selling to Charoen.
Mr Charoen cannot buy any stock
at above S$8.88 without raising his entire general offer.
DMG's Goh noted that Charoen's
offer is also at the lower end of the valuation range of independent financial
advisers hired by F&N.
"In the meantime, TCC Assets
is playing its cards right by extending the offer period to November 22 and
awaiting OUE's decision before making its next move."
If OUE does not make a bid, TCC
Assets may be able to buy more time to garner additional acceptances or buy
from the open market if the price declines, noted Goh.
The general offer for F&N was
launched on September 13 after ThaiBev and TCC Assets raised their combined
stake in the firm above 30 per cent.
But a spanner was thrown into the
works last month when OUE said it is in talks with some parties and
"considering all options" regarding F&N, including a bid for its
shares.
In the meantime, F&N
shareholders agreed on September 28 to sell the conglomerate's stake in Tiger
Beer brewer Asia Pacific Breweries (APB) to Heineken.
Charoen had initially looked like
he might battle Heineken for APB, but decided before the shareholders' meeting
to step aside and back the sale of F&N's stake in APB.
This leaves him fighting for
control of the rest of F&N, which has operations in property, soft drinks,
dairies, and printing and publishing.
F&N also retains a stake in a
Myanmar beer company, separate from the offloaded APB holdings.
Jonathan Kwok
Business & Investment Opportunities
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