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Posts Tagged ‘APB’

Heineken’s nuclear option

In Uncategorized on 20/09/2012 at 5:09 am

(Or “Why Thai billionaire settled”)

Thai billionaire, Charoen Sirivadhanabhakdi, offered S$8.88bn (US$7.3 bn) in cash for the 70% stake in F&N that he did not already own. The belief was that that he wanted to kill the sale of F&N’s APB shares to Heineken.http://dealbook.nytimes.com/2012/09/13/thai-billionaire-in-7-3-billion-bid-for-fraser-neave/?src=dlbksb

Well he didn’t. Instead he has agreed to support the sale of F&N’s stake in APB to Heineken NV. As part of an agreement, Heineken said it will not make a general offer for shares in F&N under the Singapore merger code.

Below was the analysis I was planning to publish before news of the deal. Tot readers might be interested in my analysis on why he wouldn’t block the APB deal, and why he wouldn’t get F&N at $8.88.

————— 

The shareholders of F%N should note that about a third of APB’s revenues come, not from Tiger, but from products licenced from Heineken. And some licences are going to renewed soon: in Indon and Vietnam. So if F&N shareholders reject the sale of F&N’s share of APB to Heineken, and if Heineken cuts its nose to spite its face, APB is worth only S$36.7. Actually, this fact explains something I never understood: Tiger was not APB’s premier offering in a number of regional products; a Heineken product was. Now I know why: ang mohs (APB is managed by Heineken) clever to ensure that Heineken products have a presence.

So this is shumething the Thai bidder of F&N has to take into consideration given that he is geared to his eyeballs and beyond. He also has to take into account that APB could be delisted if the free float drops a little more. Co must have free float of at least 10% of shares.

All F&N shareholders also have to take into account that

– Heineken’s shareholders don’t want it to overpay for APB,

– Heineken has mgt control of APB, and

– even if Heineken withdraws its bid, it can take control of APB via arbitration and has the right of first refusal over F&N’s APB shares. F&N directors have said that in case of dispute over valuation, the mechanism is not related to its share price. So could get less.

My guess is that he will not try to block the sale at the coming EGM of F&N. He wants the cash and other assets of F&N (soft drinks?) in a break-up of F&N. But his offer of S$8.88 is too cheap. F&N closed yesterday at 8.97. Note F&N plans to return effectively S$2.12 a share if its shareholders approve the sale of APB shares.

ThaiBev?F&N: Reason no funding required?

In Uncategorized on 12/09/2012 at 9:31 am

 Yesterday, ThaiBev said it was “not seeking funding for a potential general offer for F&N”. Previous post

Seems that there was no appetite among the S’poran and M’sian banks it approached to fund the takeover. So it didn’t try to get funding.

Oh and the party acting in concert with it is the controllling shareholder’s son-in-law’s co that bot the APB shares from OCBC and friends ($45) and in the market.

ThaiBev: Time for a Pause that Refreshs? Time for a Tiger?

In Vietnam on 11/09/2012 at 5:46 am

Why Thaibev and friends are trying to line up S$9bn from banks for a general offer for F&N, and so derail the APB sale.

Problem is that if they win and block the sale, APB could still go to Heinken on worse terms. Heineken has the right of first refusal over the APB shares held by F&N/ Heineken jointly and there is a formula to resolve valuation questions: not based on stk market prices. Meanwhile, Heineken still has mgt control. So far, the Thais have played the game shrewdly, but things could go wrong. And they are highly leveraged.

Asia overtook Europe and the Americas in 2007. In 2011 it drank 67bn litres of beer, to the Americas’ 57bn and 51bn in Europe, according to Euromonitor.

Top consumers of beer by region

What’s more, as developed markets such as Europe, the US and Australia stagnate, Euromonitor forecasts that beer consumption (by volume) will grow by 4.8% in Asia Pacific every year between 2011 and 2016.

AND

 the countries with the biggest growth prospects in the region are Vietnam, Cambodia and Laos, where Euromonitor forecasts that volumes drunk will grow at up to 9% per year between 2011 and 2016.

http://www.bbc.co.uk/news/magazine-19488060

F&N/ APB: Slightly better terms

In Corporate governance on 03/08/2012 at 6:02 am

Secret Squirrel tells me that the F&N Board would recommend a marginally improved offer by Heineken for F&N’s share of APB. Given that Heineken already has more than 51% of APB, no one would bid against it. So if F&N rejected the offer, and the Dutch walked away, ang moh fund mgrs would be howling in pain and anger, rightly so.

Now let’s see if ThaiBev can block the bid via its stake in 24.1% in F&N. Or will it try to make a deal with the Dutch in exchange for supporting the deal. Kirin, with 15%, will be talking to F&N, to see if can gain shumething for supporting the deal.

Kirin and Coca-Cola interested in F&N’s soft drinks biz which has bigger market share in S’pore and M’sia than Coca-Cola’s: 26% versus 13%. Grewing faster too 10% average growth versus 5% in last five yrs.

F&N on its way to be a property co. Think it will have problems.

F&N/APB: Fun & games

In Corporate governance on 26/07/2012 at 6:02 pm

The price of APB closed at the takeover price, down 3.9%. Bit strange as I tot that the reason it traded to $52 yesterday was because it was in the interest of some people to keep it at above the takeover price of $50, making it more difficult for F&N to accept the bid by tomorrow. Watch and wait.

Another analysis on the break-up value of F&N http://www.breakingviews.com/asian-conglomerate-owners-owe-heineken-a-toast/21031773.article.

F&N & APB: Updates

In Corporate governance on 24/07/2012 at 7:03 pm

The Wall Street Journal reports: “Kirin Holdings Co. is in early discussions with bankers for a potential bid for Asia Pacific Breweries Ltd., a move that could intensify the battle for control of the Singapore maker of Tiger beer, people familiar with the matter said Monday.”

Goldmans appted to adise F&N and Nomura’s analysis 

http://www.nytimes.com/reuters/2012/07/23/business/23reuters-apb-shares.html?_r=1&src=busln&nl=business&emc=edit_dlbkam_20120723

Bid tests F&N’s corporate governance

In Corporate governance on 21/07/2012 at 5:32 am

With competitive offers for a beer business that F&N does not, in the end, control, the company’s independent directors should be working to extract the best deal for all shareholders – not just its new Japanese and Thai constituents.

Int’l media’s analysis

http://www.breakingviews.com/heineken-tries-to-take-the-asian-tiger-by-the-toe/21030929.article

http://dealbook.nytimes.com/2012/07/20/heineken-offers-4-1-billion-for-asia-pacific-breweries-stake/

F&N: ThaiBev the bidder?

In Banks on 18/07/2012 at 5:36 am

As you will know, OCBC and its Great Eastern Holdings insurance unit said they had been approached with an offer to buy their combined 18.2% stake in F&N as well as their 7.9% cent holding in Asia Pacific Breweries.

FT reports that the bidder is “a unit of ThaiBev”.  It is Thailand’s largest and one of the largest beverage alcohol companies in South East Asia. Listed on SGX. Interestingly it has distilleries or breweries  in Scotland, Poland, Ireland and France, in addition to Thailand and China. Makes Chang Beer.

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