A group led by Singapore property firm Overseas Union Enterprise set a Jan. 3 deadline for its $13.1 billion offer to buy Fraser and Neave, as it waits out a Dec. 11 deadline for a rival bid from a Thai billionaire.
The Overseas Union-led consortium last month offered $9.08 per share for F&N, 2.25% higher than an $8.88-a-share bid from companies linked to Thailand’s third-richest man, Charoen Sirivadhanabhakdi.
The market is expecting a bidding war to unfold between the two, with F&N’s shares holding roughly between $9.30 and $9.50 in the three weeks since the Overseas Union group announced its bid - well above both bid prices.
The stock closed at $9.39 on Thursday, down 0.5% on the day.
Analysts say the Thai group is likely to raise its offer for F&N, since it is keen to expand beyond its domestic market. F&N has a property portfolio worth more than $8 billion, as well as a business in soft drinks that are popular in Singapore and Malaysia.
“Walking away is unlikely because the Thais recognised that F&N gives them the regional platform for cross-selling opportunities,” said Goh Han Peng, an analyst at DMG & Partners Securities.
“They acquired most of the F&N stake at $8.88 each, and they might not want to gain just a few% and sacrifice a long-term opportunity,” he added.
The Thai group is F&N’s biggest shareholder with a 33.6% stake, the majority of which was bought from Singapore’s OCBC group for S$8.88 a share in July. It had also received acceptances from F&N shareholders representing a further 1.4% stake.
The Overseas Union group’s bid is conditionally backed by Japan’s Kirin Holdings Co, F&N’s second-biggest shareholder with a stake of around 14.8%.
Charoen, through TCC Assets and Thai Beverage PCL, made a $7.2 billion bid in September to buy shares of F&N that
he did not own, valuing the Singapore property and drinks company around $12.8 billion.
The Thais have extended their offer three times from the original Oct. 29 deadline.
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