A new bid from Riady-controlled OUE values F&N at more than $10 billion.
By Nick Ferguson | 19 November 2012
OUE, which owns the Marina Mandarin hotel in Singapore, said at the end of last week that it would pay S$13.1 billion ($10.7 billion), or S$9.08 a share, for all of F&N. If shareholders approve the deal, OUE will then sell the company’s food and beverages businesses to Kirin for S$2.7 billion.
Kirin, which already holds a 14.8% stake in F&N, has agreed to vote in favour of the OUE offer and, in turn, OUE will back Kirin’s acquisition.
“[F&N’s] property portfolio would be highly complementary to OUE’s existing property portfolio,” said Riady, chairman of OUE and a member of the family that controls Indonesia’s Lippo group. “Combining both will further strengthen OUE as a leading property player in Singapore and expand our footprint in Singapore and regionally.”
Charoen, who has substantial real estate holdings in Thailand, was also interested in F&N’s property portfolio, which he considered undervalued — and his gambit almost played off. Acting through Thai Beverage and other companies, he built big positions in both F&N and Asia Pacific Breweries, a subsidiary that brews Tiger Beer.
He missed out on the beer business, but his 30% stake in F&N put him in a strong position to buy the remaining 70% of the company, for which he offered to pay S$8.88 a share in September. He now faces the option of upping his bid or backing down.
Whatever happens, Charoen now stands to earn a handsome return. He paid roughly S$3.7 billion during the summer for his F&N stake, which is now valued at around S$3.9 billion.
Credit Suisse, Bank of America Merrill Lynch and CIMB are advising the consortium led by OUE.
HSBC and Morgan Stanley advised the Thai group on the deal.