Here is the latest on the F&N saga

Analyst says this could be Singapore’s biggest corporate story this year.

IG Markets Singapore noted:

This week traders may see the mystery partners in Overseas Union Enterprise’s audacious last-minute bid for Fraser & Neave revealed. OUE announced on Friday it was in talks with some parties to put together a rival bid for the property and drinks conglomerate as the takeover saga continues.

We always said we thought another bidder would emerge alongside Thai tycoon Charoen in the battle for F&N given the attractiveness of the assets it owns. And last week this played out courtesy of OUE as a possible contender.

Charoen was already rubbing his hands with glee as he expected his lowball $8.88 a share offer for F&N would go through after agreeing with Heineken to sell it the prized jewel of Asia Pacific Breweries.

But little did he envisage Southeast Asian neighbours Indonesia would be behind a rival bid via the Lippo Group which backs Overseas Union Enterprise (OUE).

Given the F&B board referred to the Thai bid as “not compelling but fair” it must surely welcome another bidder coming in with a higher price that falls better within its own valuation of the conglomerate.

And given that F&N’s $8 billion property assets were recently revalued and found to be worth an extra $500 million more, this is another sign that F&N was being snapped up on the cheap.

Anyone making a bid for F&N would have to surpass the deal currently on the table from the Thais which would put them in the driving seat for full control of the company.

And the clock is ticking all the time. F&N shareholders have until October 29 to consider Charoen’s bid although this could be extended in light of the latest developments.

On the plus side for OUE is that F&N is a much better fit than Charoen who originally had designs on APB not the conglomerate as a whole. But on the downside OUE is relying on partners to mount a bid which could get messy when it comes to funding and controlling stakes in F&N.

But from a shareholder point of view they will want to see F&N’s full value realised. This could ironically come from OUE via a higher offer and from a potential break-up of the conglomerate.

The Thais have said they plan on keeping F&N as a single entity while a joint OUE bid could see it broken up as it divides the assets up among the parties. One feels more value will be released this way.

But shareholders will be keen to know who the partners are and see the colour of their money before they entertain this as a serious rival bid for F&N. Kirin (the most speculated interested party) or Coca-Cola would definitely add credibility to OUE’s takeover talk as big players in the soft drinks industry.

But OUE currently has challenges of its own as it looks to offload $1 billion of hotel and retail assets which may go towards its warchest in the battle for F&N.

Whoever is joining forces with OUE , this is truly shaping up to be the biggest corporate story in Singapore this year.