Friday, October 04, 2013

Westports Holdings IPO in Malaysia

By P.R. VENKAT (The Wall Street Journal)

Westports Holdings Bhd., a Malaysian port operator partly owned by Hong Kong billionaire Li Ka-shing, started taking orders from institutional and retail investors for its nearly $700 million initial public offering, the biggest such share sale in Malaysia this year.

The port operator, which manages one of Asia's busiest shipping terminals at Port Klang on the west coast of peninsular Malaysia, timed its IPO for subscriptions on a day when markets across Asia are rallying after the U.S. Federal Reserve's surprise move to leave its stimulus measures intact.

Asian markets have been volatile since late May on expectations that the Fed could start tapering off its $85 billion bond-buying program as U.S. data showed the economy was recovering. But, with the Fed's statement late Wednesday that it will continue with its low interest-rate policy, investors are likely to put money back in the Asian markets that offer a higher return compared with the U.S., which is expected to keep its rates low.

Westports is seeking to sell a total of 813.2 million shares at an indicative price range of 2.30 ringgit to 2.50 ringgit ($0.72 to $0.79) a piece, a term sheet seen by The Wall Street Journal showed.

Hutchison Port Holdings—the Singapore-listed port operator owned by Mr. Li—has a 31.5% stake in Westports. Westports was founded by G. Gnanalingam, whose son Ruben is now chief executive. Both Mr. Li's company and Mr. Gnanalingam are selling a portion of their stakes in this offering.

The offering could help rekindle Malaysia's deals market, which was home to some of the world's largest IPOs last year, including state-run palm oil planter Felda Global Ventures Holdings Bhd.'s $3.2 billion offering. But this year companies held back on IPO plans ahead of elections in May, and since then deals have been few, partly due to market conditions. A successful offering by Westports that is looking to list on Bursa Malaysia on Oct. 18, will give other companies in the IPO pipeline the confidence to proceed. They include state-backed conglomerate UMW Holdings Bhd's oil and gas unit and property firm real Iskandar Waterfront Holdings Sdn. Combined, those two could raise more than $2 billion before the end of the year, according to people familiar with their plans.

More than half of the IPO has already been taken by nine cornerstone investors, including life insurer AIA Group, Bermuda-based Utilico Investments Ltd. and Malaysia's state-run Employees' Provident Fund, the term sheet showed.

Cornerstone investors commit to buying shares in an IPO before it has been formally launched and to holding them for a fixed time period, making the IPO more attractive to other potential investors. The cornerstone investors in the Westports IPO have a three-month lock up period.

This year, Malaysia has seen a handful of IPOs since the May election, but none larger than $500 million. The last big IPO in Malaysia was nearly a year ago, when pay-TV operator Astro Malaysia Holdings Bhd. made its $1.5 billion debut in October.

Separately, people with knowledge of UMW's Oil & Gas Corp. Bhd.'s up to $850 million IPO said last week that the deal has been mostly covered with as many as eight cornerstone investors agreeing to take up shares. UMW is also likely to start taking orders from institutional and retail investors next month and could see heavy demand on the success of Westports IPO, these people said.

Bank of America Merrill Lynch, Credit Suisse Group AG, Goldman Sachs and Maybank Investment Bank Bhd. are among the banks advising Westports on the IPO.

Monday, January 21, 2013

Thai billionaire, Charoen hot offer for Singapore's Fraser and Neave Ltd, a beverage conglomerate.

Written by Reuters:

Thailand's third richest man has raised his  takeover offer for Singapore's Fraser and Neave Ltd, valuing the property and drinks conglomerate at nearly $11.3 billion, a move to fend  off a rival bid from a group run by Indonesian tycoon Stephen Riady.

Thailand's TCC Assets Ltd, headed by billionaire Charoen Sirivadhanabhakdi, increased his offer to S$9.55 a share, above the S$9.08 made by a consortium led by Riady's Singapore-listed property company Overseas Union Enterprise Ltd.

A formal auction will begin on Monday if neither bidder declares a final offer, according to rules set by Singapore's securities regulator, the Securities Industry Council (SIC). The regulator stepped in this month to try to end the takeover battle that was sparked in July when Charoen bought a 22% stake in F&N from Singapore's OCBC group.

"It is unprecedented to go down the road of an auction of this format in Singapore," said David Smith, head of corporate governance at Aberdeen Asset Management Asia Ltd.

Charoen acquired an additional 90.8 million shares, or a 6.3% stake in F&N, at S$9.55 each on Friday. The move raised his total stake in F&N- held through TCC Assets Ltd and Thai Beverage PLC - to 40.45%, including acceptance from shareholders. Charoen's previous offer was S$8.88 per share.

The Thai gambit puts the pressure on the Overseas Union-led consortium to respond by either declaring a final offer or withdrawing from Southeast Asia's largest ever corporate acquisition. If it comes to an auction, both sides must revise their offers in cash and without conditions, until a final winning offer is accepted or until the securities watchdog steps in.

At stake is a 130-year-old group with property assets worth more than S$8 billion as well as soft drinks, dairy and publishing businesses. Members of the Overseas Union-led consortium, including US hedge fund Farallon Capital Management LLC, spent Friday night discussing their next move, according to a source with direct knowledge of the matter.

The SIC, which presides over takeovers and mergers in Singapore,  has 16 members drawn mostly from the private sector, including industry  representatives, financial professionals and legal experts.

The auction structure is similar to the one proposed to resolve the stalemate between Royal Dutch Shell Plc and Thailand's PTT Exploration  and Production PLC as they battled for control over Cove Energy PLC. The Thai energy company ultimately won.

Charoen, worth $6.2 billion according to Forbes, is pitted against Overseas Union's chairman, Riady, who is also the president of the Lippo group of companies founded by his father Mochtar Riady.

Protracted battle

In the fight for F&N, Charoen has extended the deadline of his  previous offer seven times and the Overseas Union group twice. The multiple extensions have tested the patience of F&N shareholders.

F&N's independent financial advisor JP Morgan had previously said its sum-of-the-parts valuation of F&N is S$8.58 to S$11.56 per share. F&N stock last traded at S$9.58.

Hedge funds have piled into F&N, whose shares trade above Charoen's offer price in expectation of a protracted bidding war.

Kirin Holdings Co Ltd, F&N's second-biggest shareholder with a stake of around 14.8%, has given its conditional support to the Overseas Union group.

The Japanese brewer will offer to buy F&N's food and beverage business for S$2.7 billion if the Overseas Union group's bid is successful. JP Morgan's valuation of that unit is S$1.88 billion to  S$3.82 billion.

If Charoen wins control of F&N, analysts say he is likely to use F&N's distribution network in Singapore and Malaysia to sell his other products, and to market F&N brands in Thailand, where he already has an edge.

Charoen's Thai Beverage brews Chang Beer, second in Thailand in terms of market share by sales volume, on top of producing spirits, energy drinks and instant coffee. Charoen also has a sprawling property empire under TCC Land.

F&N is the leader in the soft drinks markets in Malaysia and Singapore, with a 31.3% and 21.4% market share, respectively, according  to research firm Euromonitor.