The F&N saga: Ensuring the best outcome

The F&N saga: Ensuring the best outcome

SINGAPORE - As share prices go, Fraser & Neave's (F&N) $8.88 close yesterday is about as auspicious as it gets, although its former investors might not be so upbeat.

The stock is now not far off from the final offer price of $9.55 that Thai tycoon Charoen Sirivadhanabhakdi put on the table in January.

F&N shareholders who cashed out then may have some regrets, especially if Mr Charoen takes the company to new heights.

Spare a thought, too, for some OCBC shareholders who are still upset over the bank's move to sell its F&N stake months after the deal was done. One shareholder suggested at the bank's recent annual general meeting (AGM) that OCBC erred in selling the stake too soon and too cheaply.

That question initially arose when the deal was announced last July. OCBC and insurer Great Eastern (GE) would sell their separate stakes for $8.88 per share to Thai Beverage. Their holdings in Asia Pacific Breweries (APB) were to be sold for $45 per share to Kindest Place Groups, a company owned by Mr Charoen's son-in- law.

Mr Charoen later upped his F&N offer to $9.55 per share while Heineken eventually had to pay $53 per share for APB, meaning that OCBC and GE missed out on a tidy sum of a few hundred million dollars.

The disgruntled OCBC shareholder at the AGM was told that the Thai offer was unsolicited and at a good price. It also came as a package - the offer was for both the F&N and APB holdings.

But there could have been another pressing reason OCBC agreed to the sale - a looming deadline.

Monetary Authority of Singapore rules that came into effect in 2001 state that a bank cannot hold more than 10 per cent of a company in a non-financial business.

OCBC Bank had already reduced the level of its non-core assets in part by selling stakes in Raffles Hotel and Robinson & Co.

But F&N was still a large enough asset that needed to be pared, sources suggest.

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