The takeover saga continues: Looking at OUE's offer for F&N from a new perspective

OUE's new offer might ignite a multibillion-dollar battle between the Riady family and the Thai billionaire Charoen Sirivadhanabhakdi.

Stamford Law are lead legal advisors to Fraser & Neave, Limited (F&N) as the takeover saga continues in the largest-ever M&A deal in Southeast Asia, with an OUE-led consortium launching a US$10.7 billion (S$13.1 billion) bid for F&N on 15 November 2012.  The Stamford team is led by Lean Min-tze and Yap Lian Seng.

The consortium led by Overseas Union Enterprise Ltd (OUE) is offering S$9.08 per share for F&N, trumping the earlier TCC Assets offer of S$8.88 a share. TCC Assets is a special purpose vehicle owned by Thai billionaire, Mr. Charoen Sirivadhanabhakdi and his wife.

To add to the continuing drama, Japan’s Kirin Holdings – which holds an approximate 14.8% stake in F&N - have thrown their support for the OUE offer subject to certain conditions.

If the OUE offer triumphs, this will lay the foundation for the F&N conglomerate to be broken up, with Kirin indicating that they will offer to buy F&N’s food and beverage business for S$2.7 billion, and the remainder of F&N’s businesses being retained by OUE, including the property business.

OUE is a hotel and property firm controlled by Indonesia’s Lippo Group and is a special purpose vehicle owned by the Riady Family. In a statement by Stephen Riady, executive chairman of OUE, he acknowledged F&N’s strong standing in property, F&B, publishing and printing industries, with particular reference to F&N’s property portfolio being highly complementary to OUE’s existing portfolio.

This continues on from an August interview with Mr. Riady in which he indicated OUE’s intention to boost its property holdings in Singapore, and to double its assets in as little as three years.

The OUE offer comes hot on the heels of Heineken’s successful takeover of Asia Pacific Breweries Ltd (APB), a subsidiary of F&N. This takeover deal captured the world’s attention and in that instance, Stamford Law were also lead transaction counsel to F&N, in the sale of their controlling interest in APB to Heineken.

This latest twist may mean that Mr. Charoen will have to come up with a higher offer to gain control of F&N and could set the stage for a multibillion-dollar battle between Southeast Asia’s richest families – the Riady family, one of Indonesia’s richest families, and the Thai billionaire Mr. Charoen Sirivadhanabhakdi – for control of the Singapore conglomerate.