A Thai billionaire was granted another week on Wednesday to submit an improved bid for Singapore conglomerate Fraser and Neave (F&N), as an Indonesian rival waited in the wings.
The deadline for TCC Assets, controlled by Thai drinks tycoon Charoen Sirivadhanabhakdi, "has been extended to 5.30 pm (0930 GMT) on 10 January 2013" TCC said in a statement sent out to the media after the stock market closed.
F&N became a takeover target in September after selling off its most prized asset, Tiger Beer maker Asia Pacific Breweries, to Dutch giant Heineken, which beat a rival proposal from Charoen.
Even without the brewer, F&N is still highly valued for its food and beverage, property and publishing operations, and its other shareholders are holding out for more money from the Thais and Indonesians.
TCC originally had until 5:30 pm Wednesday to improve its original bid of Sg$8.7 billion ($7.12 billion), or Sg$8.88 a share, which it made in September for the F&N shares it does not yet own.
The latest extension is the third occasion TCC has asked for more time after an Indonesian consortium led by property firm Overseas Union Enterprise (OUE) tabled a counter-offer for F&N in mid-November.
OUE is controlled by Indonesia's Lippo Group, whose founder is Indonesian tycoon Mochtar Riady. His son Stephen is OUE's executive chairman.
OUE's offer of Sg$13.1 billion ($10.7 billion), or Sg$9.08 a share, was strengthened by the backing of Japanese brewer Kirin Holdings, a major player in F&N holding about 14.8 percent of its shares.
Kirin is interested in F&N's food and beverage business, with the property interests of the conglomerate going to OUE if the bid succeeds.
As of December 19, Charoen already owned approximately a third of F&N through TCC Assets and ThaiBev, which he also chairs.
Nomura head of equity research in Southeast Asia, Lim Jit Soon, said TCC was still considering its options.
"I can only guess that it's just them buying more time, because there's no harm in extending it," he told AFP.
Lim added that based on his calculations, OUE had the potential to "push their offer price to Sg$9.80... thereafter it may not make sense for them any more."
He did not have an estimate for a potential new offer from TCC.
Both TCC and OUE need to sweeten their proposals if they want to woo more F&N shareholders, head of premium client management at IG Markets Singapore, Jason Hughes, said.
"Both offers fall well short of what shareholders should be expecting for the drinks and property conglomerate, which has a market value of at least Sg$14 billion," he stated in a report.
"If neither of the rival bidders can raise the stakes, F&N shareholders could reject both offers, which may take some fizz out of the current share price," Hughes added.
In a shareholder note issued in December, the F&N board called OUE's bid "not compelling though fair", adding that it fell at the lower end of a valuation of Sg$12.35 billion to Sg$16.65 billion made by F&N's adviser JP Morgan Chase.
F&N shares closed down 0.31 percent or three cents to Sg$9.67 shortly before TCC announced its deadline extension.