A Thai company Tuesday raised the stakes in a battle for control of a Singapore brewer about to be taken over by Dutch giant Heineken by offering a higher price for the makers of Tiger Beer.
Kindest Place, a firm owned by a son-in-law of Thai drinks tycoon Charoen Sirivadhanabhakdi, offered $55 Singapore ($44.34 U.S.) per share for the 7.3 per cent stake in Asia Pacific Breweries (APB) held directly by Singapore conglomerate Fraser and Neave (F&N).
This was 10 per cent higher than the $50 per share offered by Heineken for the 40 per cent stake held directly and indirectly by F&N, a deal valued at $5.1-billion.
If successful, Kindest Place’s $1.03-billion offer would raise its APB stake to nearly 16 per cent versus Heineken’s current 42 per cent equity.
F&N’s board had recommended acceptance of Heineken’s offer before the Thai proposal was announced.
Thai Beverage owns around 24 per cent of F&N. The other major stockholder of F&N is Japan’s Kirin Holdings, which holds 15 per cent but has flatly ruled out a bid for the Singapore brewer.
APB reported revenues of $773.42-million in its second quarter ending March 31, up 15 per cent from a year ago, with most sales generated in Southeast Asia.
Analysts said the Thai offer, valid until August 16, has put pressure on Heineken to sweeten its proposal.
But company spokesman John-Paul Schuirink said the Dutch firm was already offering “superior value for all shareholders,” not just 7.3 per cent of APB stock.
“We take note of this new offering,” he told Agence France-Presse, refusing to comment further.
Analysts had predicted that the Thai faction would make a counter-offer for APB before an extraordinary general meeting is called by F&N to consider Heineken’s proposal. No date has been announced for the meeting.
The Thai offer represented a 12.6 per cent premium over APB’s closing share price of $48.84 on Tuesday.
The Asia-Pacific region accounts for more than a third of global beer consumption and industry analysts expect demand to grow further as sales taper off in mature markets like North America and Europe.
Whoever buys APB would control 30 breweries in 14 countries: Singapore, Cambodia, China, Indonesia, Laos, Malaysia, Mongolia, New Caledonia, New Zealand, Papua New Guinea, Solomon Islands, Sri Lanka, Thailand and Vietnam.
F&N, which also has interests in non-alcoholic drinks, property and publishing, said the Thai offer lapses at the close of business on Aug. 16.
“It will start a bidding war where the board of F&N will now have to go to the shareholders with the fact that they’ve had a higher offer,” Justin Harper, a market strategist with IG Markets Singapore, said of the Thai move.
F&N shares closed at $8.28 on Tuesday, up 0.73 per cent from the day before, while APB fell 0.02 per cent to $48.84.
Heineken shares were trading lower on the NYSE Euronext Amsterdam exchange after Kindest Place’s counter-offer.
“Now all the pressure will be on Heineken, who thought they’d won the day, to see if they can better the offer,” Mr. Harper said.
“I think it could be a drawn-out battle.”
Figures from global business consultancy Euromonitor showed that the Asia-Pacific region is the world’s biggest beer market with 35.3 per cent of the total volume consumed globally last year, up from 34.4 per cent in 2010.
Total beer consumption in the region was estimated at 67 million litres in 2011, set to rise to nearly 85 million litres by 2016, thanks to the region’s rapidly growing middle classes.
APB’s flagship product Tiger Beer is popular across Southeast Asia and is positioned as an exotic premium brand in Europe.
The brewer also makes Bintang, the de facto national beer of economically booming Indonesia, Southeast Asia’s largest economy.
Heineken’s offer for APB came days after Thai Beverage began building up its stake in F&N, triggering rumours of a bid for APB.