Heineken boosts offer for Asia Pacific Breweries

HEINEKEN HAS raised its offer of more than $6 billion for Fraser Neave’s (FN) stake in the maker of Tiger beer as it tries to fend off a Thai rival, a source close to the deal said yesterday.

The Dutch brewer’s revised offer for Asia Pacific Breweries (APB) of 53 Singapore dollars per share compares to its earlier bid of S$50 and a partial offer by the Thai billionaire’s group of S$55 per APB share.

Heineken, the world’s third biggest brewer, is seeking control of Asia Pacific Breweries to gain a larger slice of one of the last beer markets still growing rapidly.

But Heineken’s efforts have been complicated by Charoen Sirivadhanabhakdi, Thailand’s second-richest man, as he tries to expand his Thai Beverage empire in the southeast Asian market.

The source said Heineken had raised its offer for the 58 per cent of APB which it does not already own. That includes the 40 per cent of APB held by its long-time partner Fraser Neave, a drinks and property conglomerate.

But it was not clear the new offer would seal the deal, said the source.

A sweetened offer could depend on FN not accepting the partial Thai bid, sources had earlier said. It was not clear whether the new offer was conditional.

ThaiBev recently became FN’s largest shareholder with 26.4 per cent. Mr Charoen’s son-in-law, through his group Kindest Place, separately offered to buy FN’s direct 7.3 per cent stake in APB at S$55 per share.

“Heineken’s resolve to win APB seems to be very strong,” said Andrew Chow, head of research at UOB Kay Hian in Singapore. “APB has an extensive distribution network and breweries. Its Tiger brand is also strong in Asia.”

The Thais have said they want to work with Heineken, but sources close to the situation say it would not be keen to co-operate with a competitor.

APB has had nearly 20 per cent annual earnings growth over the last decade. The biggest brand APB brews is Heineken, accounting for 30 per cent of its volume, but it also makes Tiger, Bintang and Anchor and runs 30 breweries in countries including Singaporeand Cambodia.ABP shares have jumped from under S$35 in mid-July before stake building began. – (Bloomberg)