Heineken NV won full control of the maker of Tiger beer on Friday after shareholders of its Asian partner, Fraser and Neave Ltd (F&N), voted in favour of selling the conglomerate's stake in the brewer for $6.3 billion.
The vote ends a two-month battle between Heineken and companies linked to Thai billionaire Charoen Sirivadhanabhakdi for control of Asia Pacific Breweries (APB), which makes several other popular brands of beer and operates 30 breweries across 14 countries.
The spotlight is now on F&N over a $7.2 billion bid for the rest of the conglomerate by Charoen through Thai Beverage PCL and TCC Assets Ltd. The Thais control 30.7 percent of F&N, which will remain a large player in the property and soft drinks businesses after the APB sale.
The Thais could have tried to block the sale of F&N's 40 percent stake in APB to Heineken but said last week they would vote in favour of the deal. The Dutch brewer, in turn, agreed not to make a competing bid for control of F&N.
Heineken, already the owner of nearly 56 percent of APB through an 81-year-old venture with F&N, sought full control of the brewer to ward off Charoen's advances and protect its interests in Asia's fast-growing beer market.
While the Thais have given their approval for the APB sale, they are not yet ready to funnel back the proceeds to shareholders.
A proposal by F&N's board to pay out S$4 billion ($3.3 billion) to shareholders via a capital reduction failed at the shareholders' meeting due to opposition from the Thais. The motion required 75 percent support but got only 54 percent.
"This move gives ThaiBev and TCC greater influence over the use of proceeds from the APB divestment as F&N's largest single shareholder," Deutsche Bank analyst Gregory Lui said in a client note seen by Reuters.
"ThaiBev/TCC could use the capital to fund acquisitions to grow F&N's business, or to make distributions which may be more amenable to ThaiBev/TCC."
By keeping the S$4 billion within F&N, the Thais would also make it more expensive for a third party to launch a counterbid for the conglomerate, other analysts and bankers have said.
The Thai group's offer for the rest of F&N that it does not own expires on October 29.
Trading of F&N shares was suspended on Friday.
Japan's Kirin Holdings Co Ltd, F&N's second-biggest shareholder with a 15 percent stake, is still holding out for potentially a higher price, banking sources said.
The Japanese brewer was exploring options including selling its F&N stake to Thai Beverage or another potential buyer, sources with direct knowledge of the matter told Reuters on Friday.
Kirin has not indicated any intention to sell, F&N's financial controller Hui Choon Kit told a news conference in Singapore after the shareholders' meeting.
The Japanese brewer said previously it was interested in F&N's food and non-alcoholic drinks business.
Kirin bought the stake in F&N for S$6.50 a share from Singapore state investor Temasek Holdings Pvt Ltd in 2010.
In a meeting attended by more than 500 shareholders, shareholder activist Mano Sabnani described the Thai offer price of S$8.88 per share as "lacklustre."
"My view is the breakup value of F&N is about S$10 and I think most analysts would agree with me," Sabnani said to the applause by some shareholders at the meeting in an air-conditioned tent set up near F&N's office.
F&N Chairman Lee Hsien Yang, in response, said the board needs to study it first.
F&N officials told shareholders, including two units of British insurer Prudential PLC, that the conglomerate will seek to expand its other businesses after the sale of APB.
F&N retains a small interest in the beer business through a Myanmar joint venture that produces Myanmar Beer, the country's best-selling beer.
The group does not intend to sell its stake in Myanmar Brewery but is instead keen to grow the business, F&N's Hui told reporters.
F&N is the leader in the soft drinks markets in Singapore and Malaysia, with a 24.5 percent and 26.9 percent market share, respectively, according to Euromonitor. But F&N's reach in the rest of the region is weak and its Asia-Pacific market share is only 0.3 percent.
F&N's property portfolio, worth more than S$8 billion, has also attracted the interest of Blackstone Group LP and global property companies, sources have told Reuters, while the beverage business could appeal to potential suitors such as Coca-Cola Co.
(With reporting by Saeed Azhar in SINGAPORE, Ritsuko Shimizu and James Topham in TOKYO and Chris Jonathan Peters in BANGALORE; Editing by John O'Callaghan and Ryan Woo)