Thai Beverage raises F&N stake, throws down gauntlet to brewing giant Heineken

Thai Beverage raised its stake in Fraser and Neave (F&N) to just below the level that would trigger a mandatory offer for the whole conglomerate, further challenging Heineken’s bid for the group’s crown jewel Asia Pacific Breweries (APB).

ThaiBev, controlled by billionaire Charoen Sirivadhanabhakdi, said on Tuesday that it had bought a 2.6 per cent stake in F&N for S$316 million (US$252 million) to bring its interest to 29 per cent. If its holding hits 30 per cent, ThaiBev would be obliged to bid for all of the Singapore conglomerate.

The stake increase is the latest move in a six-week battle pitting ThaiBev against Heineken. The Dutch brewer, the world’s third-largest, was jolted into action when Charoen became the largest shareholder in F&N, with which Heineken has a joint venture controlling Tiger beer maker APB.

“If Thai Beverage crosses the 30 per cent mark and makes a general offer, then they can block Heineken’s bid for APB. But whether or not they have the intention or the money to buy F&N, that’s anybody’s guess,” said Ng Kian Teck, lead analyst at SIAS Research.

A full takeover would stretch ThaiBev’s finances.

Moody’s Investors Service said this month that ThaiBev’s Baa2 rating remained under review for downgrade after it acquired a 22 per cent stake in F&N from Singapore’s OCBC group last month.

“ThaiBev doesn’t have the desire to buy the whole of F&N. If they want to block Heineken’s bid for Asia Pacific Breweries, they need to win over Kirin and some other institutional shareholders to get the 51 per cent majority,” a banking source said.