FNN / APB

FNN / APB: in a likely surprise move, Thai Bev and TCC Assets said they will back Heineken’s $5.6b bid for FNN’s 40% stake in APB, giving clarity now that Heineken’s offer will be approved. F&N shareholders are scheduled to meet Sep 28 to vote on Heineken’s offer to buy F&N’s shares in APB. F&N recommended that holders accept Heineken’s increased $53-per-share bid in Aug. Heineken had said it would be its final offer. In turn, Heineken has promised not to bid for the whole of FNN, which has other businesses, including property and soft drinks, that interest the Thai group. Recall, TCC, controlled by Thai billionaire Charoen Sirivadhanabhakdi, offered $9b on 13 Sep to buy the 70% of F&N he didn’t control, initially throwing Heineken’s takeover of APB into doubt. ING Groep says the agreement should be “very positive” for Heineken’s share price, as the co will not need to raise its offer further and it will be able to consolidate the APB business. Gaining control of APB, the crown jewel of F&N, would give Heineken the much-needed boost to consolidate its position in the fast-growing Asia beer market, via the Tiger and Bintang APB beer brands that make up nearly 50% of the beer market in Indonesia, Malaysia and Singapore. Charoen’s agreement to support Heineken’s offer for APB may spur speculation that he may want to break up F&N. Japan’s Kirin (2503 JP) owns a 15% stake in F&N and had considered making a bid for its food and soft-drinks unit. Coca-Cola (KO US) was also said to have explored a bid for the drinks operations. F&N got 30% of its 2011 revenue of $6.3b from property, 12% from soft drinks and 17% from dairies. Separately, Prudential (via its Eastspring Investments unit) sold a total of 2.65m shares in FNN after the stock soared last week following Charoen’s takeover bid. 2.5 m F&N shares were sold at $8.70 each and another 150,000 shares at $8.97 last week. Jackson National Asset Management, another Prudential unit, bought 5,000 F&N shares at $8.92. The Prudential units are the third largest shareholder in F&N. After the transactions, Prudential and its subsidiaries own or control around 111.38m shares or ~ 7.8% of F&N, down from ~ 8%.