Thai billionaire muscles in on Heineken Tiger beer deal

Reuters: Heineken’s  $6 billion bid for Asia Pacific Breweries (APB) faces a challenge from a group linked to Thai billionaire Charoen Sirivadhanabhakdi, which could force the Dutch brewer to pay more to control the maker of Tiger beer.

The world’s third biggest brewer has to decide whether to raise its bid or risk losing control of one of Asia’s fastest growing brewers to the family of Thailand’s second richest man.

Heineken agreed to buy stakes in the Asian brewer held by Singapore conglomerate Fraser and Neave (F&N) last Friday, only for the Thai group to muscle in on the deal on Tuesday with a higher price for F&N’s 7.3 percent direct stake.

Kindest Place Groups, a vehicle owned by Charoen’s son-in-law, made a surprise offer of S$55 a share to buy F&N’s direct stake in APB, S$5 a share more than Heineken agreed to pay in its deal announced last week. F&N controls around 40 percent of APB, mostly via a joint venture with Heineken.

The Thai companies, ThaiBev and Kindest Place, had already put Heineken on the back foot last month when they paid $3 billion to take stakes in F&N and APB.

Heineken, which controls 42 percent of APB, agreed to pay F&N S$50 a share for its APB stake which values it at S$5.1 billion ($4.1 billion). The Heineken deal is worth around $6 billion if a buyout of minority shareholders is included.Heineken’s APB bid is already at a rich multiple of 17.4 times core profits, above the 15.4 times paid by Anheuser Busch InBev for Mexico’s Modelo in June.

The Amsterdam-based brewer put a brave face on the situation saying its bid was better than the Thai offer.