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UPDATE 1-Thai group to reject F&N's proposed S$4 bln payout
September 26, 2012 / 2:50 PM / 5 years ago

UPDATE 1-Thai group to reject F&N's proposed S$4 bln payout

* ThaiBev, TCC Assets control 30.7 pct of F&N

* F&N shareholders to vote on APB sale, payout on Friday

* Charoen offered to take over F&N at S$8.88 per share (Rewrites first paragraph, adds analyst quote, share price, details)

By Eveline Danubrata

SINGAPORE, Sept 26 (Reuters) - Companies linked to a Thai billionaire said they will vote against Fraser and Neave Ltd's proposal to pay out S$4 billion ($3.3 billion) to its shareholders, in a move that some analysts say could make it easier for the Thais to gain control of the Singapore company.

Charoen Sirivadhanabhakdi, Thailand's third-richest man, launched a $7.2 billion offer this month to buy out other shareholders of F&N at S$8.88 a share.

F&N, whose board has agreed to sell its 40 percent stake in Tiger beer maker Asia Pacific Breweries (APB) to Heineken NV, said last month it planned to cancel one for every three shares held by all shareholders and pay out S$8.50 for each canceled share.

Wednesday's joint statement by Thai Beverage PCL and TCC Assets Ltd, collectively F&N's largest shareholder with a 30.7 percent stake, did not provide details on why they would vote against the proposed capital reduction.

Some analysts had expected the Thais to reject the proposal as this move was likely to put pressure on F&N's share price and make it easier for the group to buy out the minority shareholders. F&N shares closed steady at S$8.90 on Wednesday.

"By rejecting the capital reduction, ThaiBev and TCC are indicating they prefer to keep the cash within F&N after the APB sale, at least for the time being," said Goh Han Peng, an analyst at DMG & Partners Securities.

"They are still in the midst of making a takeover offer for F&N, and should they succeed, they would probably do a review of F&N's capital needs. Keeping the cash within the company will give them more options, especially if they decide to go on an expansionary track," he added.

The divestment of F&N's brewing assets and the offer from the Thais could force a full break-up of F&N, which also has a large property portfolio as well as soft drinks, dairies and publishing businesses.

F&N's shareholders will meet on Friday to vote on the proposed APB stake sale to Heineken, as well as the capital reduction. The Thai group had said last week it would support the APB sale to Heineken.

Japan's Kirin Holdings Co Ltd is F&N's second-biggest shareholder with a nearly 15 percent stake, followed by units of British insurer Prudential Plc with around 7.8 percent. ($1 = 1.2244 Singapore dollars) (Editing by Anshuman Daga and David Holmes)

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