By F&N deal, richest man gets richer
- Published: 23/01/2013 at 09:24 AM
- Online news:
The richest man in the country just got richer.
Dollar-billionaire Charoen Sirivadhanabhakdi is poised to win a S$13.8 billion (334.45 billion baht, US$11.2 billion) bid for Fraser & Neave Ltd. (FNN)'s property and drinks empire in Singapore.
The takeover battle has boosted the value of Mr Charoen's other stock holdings by more than $2 billion, or about 59.5 billion baht.
Charoen Sirivadhanabhakdi, Thailand's richest man, is growing richer. (Photo by Bangkok Post)
His Bangkok-based companies have surged as investors bet his expanding influence and deal making will give his whole empire a boost. Beer maker Thai Beverage Pcl (ThaiBev) closed at a record price Tuesday in Singapore, and his consumer goods distributor Berli Jucker Pcl has jumped 45 per cent in about four months on the Stock Exchange of Thailand.
"At the moment, Charoen plays a very active role in Thailand," said Kowit Pongwinyoo, Bangkok-based analyst at UOB Kay Hian. "That's why people are speculating on Charoen-related merger and acquisition fever."
Mr Charoen's efforts to gain control of F&N were boosted this week after rival bidder Overseas Union Enterprise Ltd. (OUE) pulled out. Buying F&N gives the tycoon a 130-year-old conglomerate with about S$3.6 billion in annual revenue and businesses from serviced apartments to beverages across Southeast Asia.
Charoen first invested in F&N in July and battled OUE for two months. He announced a bid of S$9.55 last Friday to top the rival group's offer.
"He is a savvy businessman and a street-smart negotiator," said Goh Han Peng, an analyst at DMG & Partners Securities Pte in Singapore. "In this takeover tussle, he kept his cards to his chest. Patient and decisive, that's how I would describe him."
Buying F&N would cap a lengthy career during which Mr Charoen, 68, expanded from running a distilling operation into beer, alcohol, sugar, and packaging businesses.
His ThaiBev has "massive distribution capacity" and will be able to ramp up sales of F&N brands in Thailand, analysts in Religare Institutional Research said in a note.
Having F&N's property business will also expand his reach in the region, Goh said. Mr Charoen's TCC Assets has a real estate arm.
The value of Mr Charoen's holdings in Thai Beverage and Berli Jucker have risen by at least $2.35 billion since when he made his September F&N bid, based on the latest disclosures of his holdings and calculations by Bloomberg from the stock prices. Thai Beverage rose 3.4 per cent to close at a record S$0.455 and Berli Jucker gained 0.7 per cent to close at 69 baht Tuesday.
Charoen was born and raised in Bangkok's Chinatown district. He bid for the rights to operate distilleries during the liberalisation of the nation's liquor industry, and later expanded into real estate and other operations. He now has a net worth of $9.6 billion, according to data from the Bloomberg Billionaire's Index.
As the businesses have grown, he has sought an increased presence overseas. The billionaire is strong in "logistic, trading and manufacturing of food and beverage in Thailand," said Sopawadee Lertmanaschai, secretary-general of Thailand's Government Pension Fund. "F&N could be a springboard with the established brand to expand in the region."
Along the way, Mr Charoen has battled adversaries at home and overseas.
Thai Beverage had to sell shares in Singapore in 2006 after anti-alcohol protesters blocked an offering in its home market. Buddhist monks and other protesters argued that a share sale by the maker of Chang beer and Mekhong whiskey would encourage alcoholism in a country where most people are Buddhist.
In 2005, Charoen forced Carlsberg A/S (CARLA) to pay $120 million to settle a legal dispute with a brewer he controlled. His family's purchase of a stake in Asia Pacific Breweries Ltd. (APB) pushed Heineken NV (HEIA) to make a bid and ultimately buy all of the maker of Tiger beer.
In the latest battle over F&N he fought another prominent Asian family. OUE Executive Chairman Stephen Riady is a son of Mochtar Riady, who controls Indonesia's Lippo Group, with businesses ranging from real estate and financial services to food across Asia.
Mr Charoen joins other prominent Thais in looking overeas. Charoen Pokhpand Group Co's $9.4 billion purchase of a stake in China's Ping An Insurance (Group) Co put Thai companies and their billionaire owners among the ranks of Asia's biggest overseas acquirers over the past year.
"A lot of Thai businessmen have done well in recent years," said Mr Goh, the DMG & Partners analyst. "These Thai tycoons have outgrown their domestic market and now want to expand in the region."
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