Singapore's APB shares jump to record, below Heineken's offer price
SINGAPORE (Reuters) - Shares of Asia Pacific Breweries Ltd jumped to a record after Dutch brewer Heineken NV launched a $6 billion bid to take over the Singapore maker of Tiger Beer to strengthen its foothold in the fast-growing region.
Within the first hour of trading, APB rose 17 percent to S$49.00, but the stock was still below Heineken's offer of S$50.00 a share because of uncertainty over whether the deal would go through.
Shares of Fraser and Neave Ltd , a Singapore conglomerate whose joint venture with Heineken has a 65 percent controlling stake in APB, were about 5 percent higher. F&N said its board was considering Heineken's offer.
Heineken's offer came after Singapore bank Oversea-Chinese Banking Corp and an affiliate group received a $3 billion bid for their stakes in F&N and APB from companies linked to Thai billionaire and founder of Thai Beverage PCL , Charoen Sirivadhanabhakdi.
"There's still some uncertainty as it is not clear how F&N will react to the offer," said Goh Han Peng, an analyst at DMG & Partners Securities.
"If the F&N shareholders do not accept the offer from Heineken, they may come up with a hostile offer for APB, meaning they will go to the minority shareholders. The second way is to go directly to F&N and mount a takeover because shares in APB are very illiquid."
Nomura raised its target price on F&N to S$9.16 from S$8.08 and maintained its neutral rating. Nomura said if F&N accepts Heineken's offer, it will reap cash proceeds of about S$5.2 billion, but lose an important contributor to its earnings.
Without APB, F&N will have a smaller food and beverage business comprising its ASEAN soft drinks and dairies businesses, Nomura said. But the Singapore conglomerate, which also owns a property division, will have additional cash of S$5.2 billion, or S$3.66 per share, part of which could be paid as a special dividend, according to Nomura.
Heineken's rivals, Thai Beverage PCL and Japan's Kirin Holdings Co Ltd <2503.T>, are unlikely to readily let the world's third-largest brewer take control of a beer empire stretching from Mongolia to New Zealand, analysts said.
Kirin holds 14.7 percent of F&N.
"Without APB, Kirin and ThaiBev may push for a demerger of the property business so the businesses can be valued separately and control for the F&B and property assets settled accordingly," Nomura said. ($1 = 1.2569 Singapore dollars)
(Reporting by Eveline Danubrata; Editing by Ryan Woo)
(c) Copyright Thomson Reuters 2012. Check for restrictions at: http://about.reuters.com/fulllegal.asp
Within the first hour of trading, APB rose 17 percent to S$49.00, but the stock was still below Heineken's offer of S$50.00 a share because of uncertainty over whether the deal would go through.
Shares of Fraser and Neave Ltd , a Singapore conglomerate whose joint venture with Heineken has a 65 percent controlling stake in APB, were about 5 percent higher. F&N said its board was considering Heineken's offer.
Heineken's offer came after Singapore bank Oversea-Chinese Banking Corp and an affiliate group received a $3 billion bid for their stakes in F&N and APB from companies linked to Thai billionaire and founder of Thai Beverage PCL , Charoen Sirivadhanabhakdi.
"There's still some uncertainty as it is not clear how F&N will react to the offer," said Goh Han Peng, an analyst at DMG & Partners Securities.
"If the F&N shareholders do not accept the offer from Heineken, they may come up with a hostile offer for APB, meaning they will go to the minority shareholders. The second way is to go directly to F&N and mount a takeover because shares in APB are very illiquid."
Nomura raised its target price on F&N to S$9.16 from S$8.08 and maintained its neutral rating. Nomura said if F&N accepts Heineken's offer, it will reap cash proceeds of about S$5.2 billion, but lose an important contributor to its earnings.
Without APB, F&N will have a smaller food and beverage business comprising its ASEAN soft drinks and dairies businesses, Nomura said. But the Singapore conglomerate, which also owns a property division, will have additional cash of S$5.2 billion, or S$3.66 per share, part of which could be paid as a special dividend, according to Nomura.
Heineken's rivals, Thai Beverage PCL and Japan's Kirin Holdings Co Ltd <2503.T>, are unlikely to readily let the world's third-largest brewer take control of a beer empire stretching from Mongolia to New Zealand, analysts said.
Kirin holds 14.7 percent of F&N.
"Without APB, Kirin and ThaiBev may push for a demerger of the property business so the businesses can be valued separately and control for the F&B and property assets settled accordingly," Nomura said. ($1 = 1.2569 Singapore dollars)
(Reporting by Eveline Danubrata; Editing by Ryan Woo)
(c) Copyright Thomson Reuters 2012. Check for restrictions at: http://about.reuters.com/fulllegal.asp
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