Heineken still intent on netting Tiger beer

AP News
Posted: Aug 08, 2012 8:13 AM
Heineken still intent on netting Tiger beer

AMSTERDAM (AP) — Dutch brewer Heineken NV said Wednesday it will keep fighting to buy the shares it doesn't already own of Asia Pacific Breweries Ltd of Singapore, the owner of Tiger beer, despite efforts to upset the deal by a Thai tycoon.

Last week Heineken's longtime co-investor in APB, Fraser and Neave Ltd., agreed to sell its 39.7 percent stake in APB to Heineken at 50 Singapore dollars per share, plus some other operations, for a total sum of $4.23 billion. Heineken's bid represented a 45 percent premium to APB's share price before the offer, and the sale would have given Heineken 82 percent of APB's shares.

But on Aug. 7, a company controlled by the family of Thai billionaire Charoen Sirivadhanabhakdi offered Fraser & Neave 55 Singapore dollars per share for a 7.3 percent stake in APB. Though that offer is 10 percent higher than Heineken's offer on a per-share basis, the Dutch brewer insisted Wednesday that its offer is better because it covers F&N's whole stake.

If F&N accepts Sirivadhanabhakdi's bid, it would still have a significant holding of over 30 percent in APB, and Heineken without a controlling stake.

To complicate the situation, one of Sirivadhanabhakdi's companies has built up an 8 percent stake in APB and another has taken control of 24 percent of F&N, giving him some influence over the company's board.

APB also owns the Anchor and Bintang brands, while Tiger has a dominant position in many Asian markets, notably Vietnam, Malaysia, New Zealand and Singapore.

Singapore analysts DMG & Partners Securities predicted Heineken will have to raise its offer for the prized assets.

But Dutch analyst Richard Withagen said he believed F&N will eventually agree to Heineken's current offer as being in the best interests of all shareholders: Heineken has said it will take all F&N's APB shares, and then buy out minority APB shareholders on the same basis.

Heineken is already offering a proportionately higher price for APB on the basis of operating earnings than Belgian rival AB InBev did in its recent takeover of Mexico's Modelo and its flagship Corona brand.

"Despite a high price for the Asian assets, we believe they are of great strategic importance to Heineken," Withagen said.

Heineken shares fell more than 2 percent Tuesday after Sirivadhanabhakdi's counteroffer was made public. They were down a further 0.4 percent at €44.425 Wednesday.