SINGAPORE--Heineken NV (HEIA.AE) scooped up $293 million worth
of Asia Pacific Breweries Ltd. (A46.SG) shares Tuesday, as the
Dutch brewer moved to pre-empt any plans by Thai rivals to scuttle
a possible takeover of the maker of Tiger Beer as it jostles for a
stronger position in Asia's fast-growing beer market.
Heineken bought more than 6.9 million APB shares--or 2.68% of
the company--at 53 Singapore dollars ($42.40) apiece via open
market purchases and block trades, the world's third-largest brewer
by sales said Wednesday in a regulatory filing to the Singapore
Exchange. The purchases boost Heineken's direct stake in APB to
12.18% from 9.5% previously.
The purchases come after the Dutch brewer agreed this weekend to
pay S$5.6 billion for Fraser & Neave Ltd.'s (F99.SG) direct and
indirect stakes in APB with an improved offer of S$53 per APB
share. Heineken, which originally offered S$50 per share, said that
with its sweetened offer, it would now cost US$6.3 billion to buy
all of APB.
F&N--a Singapore conglomerate with interests in beer,
property and publishing--and Heineken share a 50-50 joint venture
that owns 64.8% of APB. F&N also owns a 7.3% direct stake in
APB.
Excluding F&N's stake, Heineken's direct and indirect
interest in the 81-year old APB joint venture now stands at about
44.6%.
Heineken hasn't said from whom it bought the APB shares in the
latest round of purchases. Two people with knowledge of the deal
said earlier Singapore state-investment company Temasek Holdings
Pte. Ltd. had sold its 1.4% stake to the Dutch brewer.
Tuesday's share buys allow Heineken to consolidate its position
in APB amid concerns that Kindest Place Group, an entity owned by
son-in-law of Thai billionaire Charoen Sirivadhanabhakdi, may try
to complicate the Dutch brewer's plans to acquire one of Asia's
most profitable beer businesses.
Earlier this month, Kindest Place, which owns 8.6% of APB,
offered to pay S$55 a share for F&N's 7.3% direct stake in APB.
That move prompted Heineken to sweeten its offer for APB over the
weekend.
Even with Tuesday's moves, the fate of Heineken's APB bid still
rests with F&N's shareholders, among them rival brewers like
Mr. Charoen's Thai Beverage PCL (Y92.SG) and Japanese beverage
giant Kirin Holdings Co. Ltd. (2503.TO).
Heineken, which has said it intends to take APB private, needs
the approval of a simple majority of F&N's shareholders to seal
a deal for the Singapore-based beer maker.
F&N's board said Saturday it accepted Heineken's improved
offer and will recommend its shareholders do the same. The company
hasn't set a date for the shareholder meeting yet.
ThaiBev, the maker of Chang beer, is F&N's single largest
shareholder with a 26.4% stake, followed by Kirin with 15%, giving
them significant sway over Heineken's APB bid.
A senior ThaiBev executive on Wednesday declined to comment on
Heineken's latest moves, saying the company would comment only
after F&N's shareholder meeting.
At stake for Heineken is a chance to boost its presence in
Asia's lucrative beer market at a time when it is faces lackluster
sales in its home base of Europe, where recession and government
austerity measures have curbed consumer spending in recent years.
Drinkers there have been turning to cheaper and less profitable
brands, resulting in margin pressure.
APB has 30 breweries and 40 brands spanning 14 Asian countries.
It also brews Heineken beer for some markets in the region. The
company's Tiger and Bintang APB beer brands have nearly 50% of the
beer market in Indonesia, Malaysia and Singapore, according to data
provider Euromonitor.
--Phisanu Phromchanya in Bangkok contributed to this
article.
Write to Chun Han Wong at chunhan.wong@dowjones.com and P.R.
Venkat at venkat.pr@dowjones.com
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