Singapore's F&n May Break-Up If Thai Bid Wins: Analysts

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Singapore's F&N may break-up if Thai bid wins: analysts

SINGAPORE, Sept 12, 2012 (AFP) - A Thai tycoon's bid for Singapore's Fraser and Neave (F&N) group could lead to its breakup and scuttle the takeover of an Asian brewer by Dutch giant Heineken, analysts said Wednesday.

Thai Beverage, controlled by billionaire Charoen Sirivadhanabhakdi, on Tuesday said it was exploring a bid for F&N in tandem with an unnamed party.

If the Thai bid is launched, "this process could result in a break up of F&N," said Jason Hughes, head of premium client management for IG Markets Singapore.

F&N owns 40 percent of Asia Pacific Breweries (APB), makers of Tiger Beer and other popular Asian brands. Heineken owns 42 percent of APB and is offering Sg$5.6 billion ($4.53 billion) for F&N's stake.

F&N's board has recommended acceptance of the Heineken offer in a September 28 shareholder meeting, but the Thai Beverage move has triggered speculation that F&N could be broken up to unlock value.

Breaking up F&N would "allow for what might be seen as sensible release of shareholder value, to get the most out of the current structure", Hughes said.

Other companies including big names in the beverage sector such as Coca-Cola and Kirin may snap up portions of F&N to expand their presence in Asia, he told AFP.

"We ve seen across-the-board interest from the likes of Coca-Cola and Kirin... If they were to take over parts of F&N, it will add more to their portfolio and encourage the expansion of their business here," he said.

In an investor note, CIMB Research listed possible scenarios if F&N were to split, including Thai Beverage snapping up the food and beverage arm while its anonymous partner buys out the property business.

Thai Beverage has been steadily building up its holdings in F&N and its stake now stands at 29 percent, just one percentage point below the threshold that will trigger a mandatory offer for all outstanding shares it does not own.

Goh Han Peng, an analyst at DMG & Partners, also told Dow Jones Newswires that the potential bid by Thai Beverage, makers of Chang Beer, could be an attempt to upset the Heineken takeover of APB.

"Making the offer at this stage is likely to be motivated by ThaiBev attempting to block the sale of F&N's stake in APB to Heineken, although it is possible that it is simply after the non-brewery assets and property business," he said.

-- (c) Copyright AFP 2012-09-12