Indonesia’s Overseas Union Enterprise tables $10.7 bn counter-bid for Fraser and Neave

A consortium led by Overseas Union Enterprise (OUE), an Indonesia-based hotel and property company, has set the stage for a corporate takeover battle with Thai billionaire Charoen Sirivadhanabhakdi for Fraser and Neave Ltd (F&N) after it tabled a S$13.1 billion ($10.7 billion) counter-bid for the Singapore-based conglomerate.
 
The OUE offer is being made through a unit of Cayman Islands-based Arbon Holdings Ltd, in which OUE holds a 50 per cent stake and the remaining by certain investment funds and accounts managed by Farallon Capital and Noonday Global and other investors.

OUE, controlled by Indonesia's Lippo Group, yesterday offered to buy F&N for S$9.08 each, trumping an S$8.88 per share offer (worth S$7.2 billion) from Sirivadhanabhakdi.

OUE's offer is subject to it receiving a minimum of more than 50 per cent acceptance.

Japanese brewer Kirin Holdings, Asia's largest beverage company, which holds a 14.8 per cent stake in F&N, has backed OUE's offer, and said that it will tender its stake for S$1.9 billion ($1.6 billion). If OUE's bid is successful, Kirin plans to buy back F&N's food and beverage operations for about S$2.7 billion.

Kirin had acquired the stake in F&N in 2010 for around $970 million in order to become Asia's top food and beverage company, and Senji Miyake, president of the Tokyo-based company had earlier often said that the investment had been done because of its interest in F&N's food and beverage business.

Although F&N's board has not recommended OUE's counter-bid to shareholders, it has agreed to pay a break fee of as much as S$50 million, an indication that it prefers OUE's superior offer.