Thai billionaire Charoen Sirivadhanabhakdi made a $7.2 billion cash offer to take over Fraser and Neave Ltd , in a move that could potentially derail Heineken NV's separate bid for F&N's key beer business two weeks before a crucial shareholder vote.
The offer came after Charoen's Thai Beverage PCL and TCC Assets, a linked investment vehicle, increased their combined stake in the drinks and property group to 30.36 percent, according to a stock filing to the Singapore Exchange.
Under Singapore law, a bidder must make a mandatory offer for a company if its stake reaches a 30 percent threshold.
"We believe the offer represents an opportunity for F&N shareholders to realise the value of their investment in cash and to make a complete exit," Thapana Sirivadhanabhakdi, Charoen's son and ThaiBev's president and chief executive officer, said in a statement on Thursday.
ThaiBev's shares jumped nearly 3 percent in early trade, while F&N requested a halt in trading of its shares early on Thursday.
In the latest twist in a series of strategic steps by suitors, the Thai offer could throw into question Heineken's $6.3 billion bid for Asia Pacific Breweries Ltd , the maker of Tiger beer and operator of 30 breweries in 14 countries.
Shareholders are scheduled to vote on the proposed sale of F&N's 40 percent stake in APB to Heineken on September 28.
"Given the timing of the offer, it would appear that TCC is likely to thwart the sale of APB to Heineken. One possible outcome is that if TCC is successful in gaining control of F&N, it would want to renegotiate the sale of APB to Heineken," Jit Soon Lim, an analyst at Nomura, said in a note to clients.
"One risk of the scenario is that the sale falls through and further strains the relationship with Heineken, with implications for marketing rights for Heineken by APB in Asia."
ThaiBev, which has not said how it will vote at the September 28 meeting, did not mention Heineken in its statement. ThaiBev, which took a bridge loan to finance its earlier F&N stake purchase, said it would not incur any more debt for the offer.
"We hold F&N in high regard and we believe its long-established track record and success in its core businesses will be beneficial to our group," it said.
For its part, Heineken only took note of ThaiBev's latest announcement, adding in a statement: "The company will review the content carefully and has no further comment to make at this time."
Beyond drinks, F&N may be a real estate play for Charoen, the son of a Bangkok street vendor and Thailand's third-richest man, according to Forbes. He already has substantial investments in Singapore's booming real estate market.
Breweries contributed 41.1 percent of F&N's total revenue of S$4.02 billion ($3.27 billion) for the nine months to June 30. Soft drinks and dairy products made up 29.2 percent, property was 21.3 percent and printing and publishing was 7.1 percent.
TCC Assets offered S$8.88 a share, the same price ThaiBev paid to buy a 22 percent stake in F&N from Singapore's Oversea-Chinese Banking Corp group in mid-July. It represents a premium of 4.3 percent to F&N's last traded price.
For two months, ThaiBev and Heineken fought for control of APB. Heineken sweetened its offer and won over F&N, which agreed to sell its APB stake to the Dutch brewer.
The deal requires approval from F&N shareholders, including ThaiBev and Japan's Kirin Holdings Ltd <2503.T>.
In its presentation slides for investors, F&N said the board recommended Heineken's offer because of the attractive valuation, limited options for the stake held by their joint venture and constraints related to the APB business.
Heineken's offer represents a significant premium to the historical trading multiples for comparable companies, F&N said. It added that Heineken had first right of refusal to the 65 percent of shares held through their APB joint venture.
F&N had shareholders' funds, including non-controlling interests, of around S$8 billion and total assets of about S$14 billion as at 30 June 2012, according to the offer documents.
F&N's property portfolio, worth more than S$8 billion, has also attracted the interest of Blackstone Group LP and other global property companies, sources have told Reuters. Its beverage business could appeal to potential suitors including Coca-Cola Co and Kirin Holdings Co Ltd <2503.T>.
Besides market-leading positions in soft drinks and dairies in Singapore, Malaysia and Thailand, F&N also has distribution in emerging markets such as Vietnam and Myanmar, according to DMG and Partners Securities.
TCC Assets advisers DBS Group Holdings Ltd and United Overseas Bank Ltd said in the filing that the group has sufficient financial resources for the bid. Morgan Stanley is also advising the bidder.
($1 = 1.2296 Singapore dollars)
(Editing by John O'Callaghan and Ken Wills)