Thai billionaire Charoen Sirivadhanabhakdi’s plan to block a Fraser & Neave dividend may be a tactic to push the Singapore conglomerate’s shareholders into accepting his US$7.3 billion ($9 billion) acquisition offer.

Thai Beverage Pcl and TCC Assets, controlled by Charoen, will vote against F& N’s plan to distribute $4 billion to shareholders at a special general meeting tomorrow, according to yesterday’s statement to the Singapore Stock Exchange.

F& N shareholders are scheduled to vote on the company’s plans to sell its 40% stake in Asia Pacific Breweries to Heineken NV and to distribute proceeds from that sale through a dividend. Charoen, who this month made a $9 billion offer to buy the rest of F& N, has pledged to back Heineken’s purchase of the brewer. He is still able to block F& N’s dividend payment because it needs approval from 75% of shareholders.

“It’s another tactic,” said Jonathan Foster, Singapore- based director of Global Special Situations at Religare Capital Markets, referring to the Thai dividend veto. “By doing this you reduce the alternatives available to F& N shareholders, you increase the uncertainty for them, and that’s going to have the result of getting them to accept your offer.”

F& N shares fell 0.1% to $8.89 in Singapore as of 1:47 p.m. local time, above Charoen’s offer of $8.88 a share.

F& N shareholders won’t vote on the Thai offer for F& N tomorrow. A date for that vote hasn’t been scheduled. Thai Beverage and TCC Assets have a stake of about 30.66% in F& N, according to yesterday’s statement.


ADJOURNING VOTE
The vote on the payout could be adjourned until after the period of the Thai offer runs out, Foster said. F& N is looking at other alternatives to distribute proceeds to shareholders, it said today.

“The F& N board will look into other options of distributing part of the sale proceeds to shareholders upon the expiry of the TCC offer period,” said Elaine Lim, a spokeswoman for F& N at its public relations firm, Citigate Dewe Rogerson.

F& N last month said it plans to distribute to shareholders about $4 billion of the proceeds from the sale of its stake in APB. F& N will cancel one share for every three shares held, it said, and make a cash distribution of $8.50 for each share canceled.

Charoen’s F& N bid is the largest takeover announced by a Thai company in at least 10 years, according to data compiled by Bloomberg. A successful bid by Charoen’s companies would add fast-growing soft drinks, dairy and real-estate businesses to their portfolio.

Charoen’s Thai Beverage and TCC said earlier this month that they will back Heineken’s $5.6 billion offer for F& N’s beer business. Vichate Tantiwanich, Thai Beverage’s spokesman, didn’t immediately respond to an e-mail seeking comment.

KIRIN’S INTEREST
The billionaire’s agreement to support Heineken’s offer for APB spurred speculation that he would break up F& N, a 129-year- old group. Japanese brewer Kirin Holdings Co. owns a 15% stake in F& N and had considered making a bid for its food and soft-drinks unit, several people with knowledge of the matter said in July.

Nahoko Abe, a spokesman for Kirin, declined to comment on ThaiBev’s announcement or on how it plans to vote at the shareholder meeting tomorrow.

“I think Kirin should sell its stake as they are not getting the money,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo. “The takeover bid has a premium so they will definitely get their share of return.”

ThaiBev’s decision to veto F& N’s capital-reduction plan is strategic, CIMB says. “Although ThaiBev misses the chance to reduce its gearing, we believe this is a positive move as it increases the likelihood that F& N shareholders will accept TCC Assets’ $8.88 offer.” CIMB says.

F& N shareholders must either accept the $8.88/share offer to realise returns or run the risk F& N’s share price will collapse without the capital reduction’s backing if the Thai group’s offer is allowed to lapse. CIMB adds, the Thai group could also be eyeing more of the cash from the APB sale as it would receive only 30.4%, or $1.2 billion, if the capital reduction proceeds.

If the Thais mop up more of F& N or gain control, they would be entitled to a greater portion and could even propose a larger payout, helping finance the F& N takeover, it says. CIMB remains positive on ThaiBev as it will reap strategic benefits if the F& N offer succeeds “the current share price, even after the run-up year to date, does not fully reflect the value of its spirits business, let alone the full sum-of-parts.”

It keeps ThaiBev at Outperform with $0.60 target. The stock is down 2.4% at $0.415, but remains up around 69% year-to-date.