Heineken faces bid for APB from Thai group

HEINEKEN’S $6 billion bid for Asia Pacific Breweries (APB) faces a challenge from a group linked to Thai billionaire Charoen Sirivadhanabhakdi, which could force the Dutch brewer to pay more to control the maker of Tiger beer.

The world’s third-biggest brewer has to decide whether to raise its bid or risk losing control of one of Asia’s fastest-growing brewers to the family of Thailand’s second richest man.

Heineken agreed to buy stakes in the Asian brewer held by Singapore conglomerate Fraser and Neave (FN) last Friday, only for the Thai group to muscle in on the deal on Tuesday with a higher price for FN’s 7.3 per cent direct stake.

Kindest Place Groups, a vehicle owned by Mr Charoen’s son-in-law, made a surprise offer of S$55 a share to buy FN’s direct stake in APB, S$5 a share more than Heineken agreed to pay in its deal announced last week. FN controls about 40 per cent of APB, mostly via a joint venture with Heineken.

The Thai companies, ThaiBev and Kindest Place, had already put Heineken on the back foot last month when they paid $3 billion to take stakes in FN and APB.

Heineken, which controls 42 per cent of APB, agreed to pay FN S$50 a share for its APB stake which values it at S$5.1 billion. The Heineken deal is worth about $6 billion if a buyout of minority shareholders is included.

The Amsterdam-based brewer put a brave face on the situation saying its bid was better than the Thai offer. “We are convinced that our bid is richer and offers more value to shareholders,” a Heineken spokesman said.

If Kindest Place’s offer succeeds, it will control more than 15 per cent of APB, having already agreed to buy 7.9 per cent of the beer maker last month at a lower price of S$45 a share.

Mr Charoen can also try and block the full sale of APB to Heineken by voting against the deal through Thai Beverage, which he controls. ThaiBev, the maker of Chang beer, is FN’s biggest shareholder with about 24 per cent.

Analysts say Mr Charoen recognises the value of the APB business, which has a dominant position in most markets where it operates such as Vietnam and Singapore, and is expected to enjoy a rising stream of profits for many years to come. – (Reuters)