SINGAPORE--Fraser & Neave Ltd.'s (F99.SG) shareholders will
meet by the end of this month to decide the fate of Heineken NV's
(HEIA.AE) US$4.5 billion offer to buy F&N's stake in Asia
Pacific Breweries Ltd. (A46.SG), maker of Tiger beer, a person
familiar with the situation said Wednesday.
A successful deal would give the Dutch brewer control over one
of Asia's most profitable beer businesses and consolidate its
position in the fast-growing Asian beer market.
F&N said in a statement to the Singapore Exchange earlier
Wednesday that it will send a circular to its shareholders on
Thursday providing information on the proposed sale of its entire
stake in APB to Heineken. It will also include a notice for a
shareholders' meeting to vote on the offer.
The board of F&N said last month it would recommend that its
shareholders accept the Dutch brewer's offer.
F&N--which has interests in beer, property and
publishing--and Heineken share an 81-year-old, 50-50 joint venture
that owns 64.8% of APB. F&N also owns a 7.3% direct stake in
APB, while Heineken directly owns 13.77% of the company after
acquiring shares from the market in recent weeks.
Heineken, which first offered to pay 5.3 billion Singapore
dollars (US$4.25 billion) for F&N's entire 39.7% stake in APB
in July, sweetened its offer to S$5.6 billion in August in a move
to keep rival bidders at bay.
A deal would significantly boost Heineken's exposure to
high-growth developing economies as it struggles with weakness in
Europe. Now, just 1.4% of the Dutch brewer's revenue comes from
Asia.
Heineken, the maker of Amstel and Sagres as well as its
eponymous lager brand, and its rivals have struggled in Europe in
recent years as recessions and government austerity measures have
curbed consumer spending. Drinkers are turning to cheaper and less
profitable brands, putting margins under pressure.
APB's Tiger and Bintang APB beer brands have nearly 50% of the
beer market in Indonesia, Malaysia and Singapore, according to data
provider Euromonitor. APB has 30 breweries and 40 brands spanning
14 Asian countries. It also brews Heineken beer for some markets in
the region.
Heineken needs a simple majority of F&N shareholders to vote
in favor of its offer for it to succeed. It usually takes 21 days
for shareholders to meet once a company sends out a notice.
F&N had earlier proposed to distribute about 84% of the
proceeds from the sale in cash to its shareholders and use the rest
to reduce debt and strengthen its balance sheet.
Meanwhile, Thai Beverage PCL (Y92.SG) has been building its
stake in F&N, which will give it substantial clout at the
shareholders' meeting, potentially complicating Heineken's bid.
The Bangkok brewer, controlled by Thai billionaire Charoen
Sirivadhanabhakdi, now controls 29% of F&N, just short of the
30% threshold that would trigger an open offer for the rest of the
shares, under Singapore law.
Companies owned by or related to Mr. Charoen also have their eye
on APB. Kindest Place Groups Ltd., owned by Mr. Charoen's
son-in-law, earlier bought 8.6% of APB and made an unsolicited
offer to acquire a further 7.3% stake in the Tiger beer maker.
Japanese beverage giant Kirin Holdings Co. (2503.TO)--which owns
15% of F&N--will also hold significant sway over the vote.
Kirin had earlier indicated an interest in F&N's
food-and-beverage operations, but declined to elaborate on specific
plans.
ThaiBev and Kirin didn't comment on how they would vote at the
shareholders' meeting.
Write to P.R. Venkat at venkat.PR@dowjones.com and Gaurav
Raghuvanshi at gaurav.raghuvanshi@dowjones.com
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