SINGAPORE: The board of Fraser and Neave (F&N) said the S$13 billion takeover offer from Overseas Union Enterprise (OUE) is "not compelling though fair".
In a circular to shareholders on Wednesday, the F&N board noted that OUE's offer price of S$9.08 per share was near the lower end of a valuation of the company of between S$8.58 and S$11.56.
This is the revised valuation made by F&N's adviser JP Morgan Chase, which values the company now at between S$12.35 billion and S$16.65 billion.
Meanwhile, shares of F&N closed on Wednesday at their highest ever at S$9.66 per share -- 6.4 percent higher than OUE's offer price of S$9.08 per share.
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F&N is currently being fought over by Thai billionaire Charoen Sirivadhanabhakdi - through his unlisted entity TCC Assets and Singapore-listed Thai Beverage - and a consortium led by OUE.
And given that F&N's share price has been trading way above that of TCC's offer price of S$8.88 and OUE's S$9.08, analysts said OUE may have to sweeten its current offer.
F&N directors, who own shares of the company, also intend not to accept OUE's offer, unless the deal turns unconditional.
OUE has the backing of Japanese brewer Kirin Holdings, which holds a 14.8 percent stake in F&N.
F&N's independent financial advisors (IFA) also noted that Kirin's F&N offer price of S$2.7 billion is "fair, from a financial point of view".
The Thai tycoon, who currently owns about 33.4 percent of F&N, in October made a bid of S$8.7 billion for the rest of F&N that it does not own.
F&N's board has also said in October that Mr Charoen's S$8.88 per share offer is "not compelling, though fair."
But given that the F&N share price is now up by almost 56 percent this year, it looks like the markets are still expecting a higher counter offer from either party.
Yet, some experts said that may not happen.
Standard and Poor's analyst, Xavier Jean, said: "As the share price is going higher and higher, I think the likelihood that there will be very substantial increase in the bidding price is declining.
"TCC probably has had the upper hand in the beginning because it was the first mover into this type of corporate battle. They already have 34% shares. They are already making a very nice profit on the shares that they own, I think, more than a dollar per share. They might just say, 'the price is too high, we'll just try to sell it'."
TCC's offer ends on January 2 while that of OUE on January 3.
- CNA/lp
F&N board says OUE offer is "not compelling though fair"
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F&N board says OUE offer is "not compelling though fair"
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