A battle for dominance in Asia's lucrative beer market broke out Thursday as a Thai tycoon made a $7.1 billion bid for a Singapore group that includes a brewer about to be taken over by Dutch giant Heineken.
Thai Beverage (ThaiBev) and its partner TCC Assets offered other owners Sg$8.7 billion to take over Singapore's Fraser and Neave (F&N), the parent of Asia-Pacific Breweries (APB), maker of Tiger Beer and other popular brands.
The two firms, controlled by Thai billionaire Charoen Sirivadhanabhakdi, said in a statement they were offering Sg$8.88 per share for the 70 percent of F&N shares they do not yet own.
The all-cash offer came two weeks ahead of a September 28 shareholders' meeting called by the F&N board to approve Heineken's Sg$5.6 billion offer for its 40 percent stake in APB, which has 14 breweries across the region.
F&N said in a statement that the meeting will still go ahead but it was appointing a financial adviser on the Thai offer.
Heineken said it was reviewing the Thai bid and "will make a further announcement if and when appropriate".
Heineken already owns 42 percent of APB and a takeover would give it a major advantage in the Asian market, where beer consumption is booming as sales fall in mature markets such as Europe.
The Thai group's offer represented a 4.3 percent premium on F&N's closing price of Sg$8.51 on Wednesday and valued the Singapore conglomerate -- also involved in property, food, soft drinks and publishing -- at Sg$12.5 billion.
In afternoon trade, F&N shares hit a high of Sg$8.94 on the local exchange after being suspended in the morning.
ThaiBev makes Chang Beer and is also involved in food and non-alcoholic drinks.
According to Forbes business magazine, Charoen is the third richest person in Thailand with an estimated fortune of $6.2 billion as of August, with the bulk of his money coming from his beverage business.
Justin Harper, a market strategist with IG Markets Singapore, said the Thai move could scuttle Heineken's takeover of APB but Charoen's final goal remained unclear.
"It will definitely create some uncertainty among F&N shareholders as they head to the September 28 (meeting). ThaiBev have been a bit secretive in what their true intentions are and this bid sheds no real light on what these are," he told AFP.
"Thai Bev may still want to sell F&N's APB share to Heineken and use the money to purchase F&N and then break it up. They also may want to take control of F&N to stop it selling its APB stake to Heineken. Both scenarios have equal probability."
Xavier Jean, a credit analyst with Standard and Poor's, said the bid by the Thais showed they do not want APB to fall into the hands of Heineken.
"All their actions suggest so far they would rather APB remain with F&N than Heineken," Jean told AFP.
The Thai offer for F&N became mandatory after Singapore-listed ThaiBev and TCC Assets jointly crossed the 30 percent ownership level.
Thapana Sirivadhanabhakdi, chief executive of ThaiBev, said: "We believe the offer represents an opportunity for F&N shareholders to realise the value of their investment in cash and to make a complete exit from F&N."
F&N has a diversified portfolio but the crown jewel is its stake in APB.
APB reported in August that its revenues for the third quarter to June rose almost 10 percent to Sg$781.33 million from a year ago.
