The F&N board accepted the improved offer of S$53 per share from the Amsterdam-based brewing firm, through its wholly-owned subsidiary Heineken International B.V. (HIBV), for its 39.7% stake in APB for a total consideration of S$5.4bn.
Heineken has also agreed to pay an additional S$163m for F&N’s interest in non-APB assets held by Asia Pacific Investment (APIPL) - the joint venture between F&N and Heineken that operates APB.
Heineken currently owns a 32.4% stake in the joint venture, through which Heineken is distributed in key APB markets. APB also manufactures and markets Tiger beer, Anchor beer, Bintang beer and Baron’s Strong Brew.
The S$53 per share offer is an improvement on the S$50 per share offer made by Heineken on 20 July 2012.
Before it can be completed, the transaction must be accepted by a majority of F&N shareholders and be given regulatory approval from relevant competition authorities.
Mandatory general offer (MGO)
If completed, the transaction will increase Heineken's interest in APB to 81.6% - triggering a mandatory general offer (MGO) for all the remaining shares of APB that the Heineken Group doesn’t already own.
If all such shares are tendered, the total cash consideration for the MGO would be S$2.5bn.
Commenting on the proposed transaction, Heineken chairman and CEO Jean François van Boxmeer said: “I am pleased that F&N’s Board has agreed that our increased offer, which is now final, represents excellent value for F&N and APB shareholders. I would like to thank Chairman Lee for the role he had played in securing this important agreement.”
Heineken hopes to complete the proposed by the end of 2012, at which point the MGO will be launched.
“F&N and Heineken are both working towards a swift completion of the Proposed Transaction, which is expected to complete in the fourth of 2012, but no later than 15 December 2012,” said a Heineken company statement.
“Subsequently, the MGO process will be launched, with a view to privatising and delisting APB,” it added.
Improved bid
Heineken intends to fund the proposed transaction and MGO though available cash of approximately €2bn following a recent €1.75bn bond issue, a €2bn credit facility and a new bridge commitment arranged by Credit Suisse and Citi – who are acting as financial advisers to Heineken throughout the proposed transaction.
For the past couple of weeks, it had appeared that Heineken was on the back foot after Thailand-based Kindest Place Group Limited (KPG) trumped it’s offer with an improved conditional bid of S$55 per share to acquire a direct 7.3% stake in APB.