Heineken mulls increasing offer for Asia Pacific Breweries

Dutch brewer Heineken NV (AMS:HEIA) is holding discussions to possibly improve its SGD50.00 (USD39.93/EUR32.26) a share offer for the direct and indirect stakes in Singapore-based peer Asia Pacific Breweries Ltd (SGX:A46), or APB, held by Fraser & Neave Ltd (SGX:FNN), or F&N, Reuters reported today citing knowledgeable sources.

The Dutch firm could lift its offer by up to 10% subject to F&N’s rejecting an unsolicited and conditional bid of SGD55.00 apiece for its direct 7.3% stake in APB. The SGD1bn partial bid was launched last week by Thailand’s Kindest Place Groups Ltd (KPG), which is owned by Thai billionaire Charoen Sirivadhanabhakdi’s son-in-law. Charoen is the owner of Thai Beverage Pcl (SGX:Y92), F&N’s biggest shareholder with some 24%.

Neither F&N, nor Heineken wished to comment.

Heineken’s total bid for the 58% stake in APB, which it does not own, is valued at SGD7.7bn. This includes a mandatory general offer for minorities in APB for up to SGD2.4bn. F&N’s board already recommended the Dutch firm’s offer to its shareholders on 3 August.

Goldman Sachs (NYSE:GS) serves as advisor of F&N, whereas Citigroup (NYSE:C) and Credit Suisse (NYSE:CS) act as advisers to Heineken. KPG uses the services of Morgan Stanley (NYSE:MS) and HSBC (NYSE:HBC).

UK house prices rise three times the rate of wage inflation

House prices in the UK have continued to stretch further away from the reach of millions of workers, a new study confirmed today.

Research from the National Housing Federation shows that house prices have risen three times as much as average incomes over the last ten years.

In 2001 the average price of a home stood at GBP121,769 and the average salary was GBP16,557. A decade later the price of a home had shot up 94% to GBP236,518, while wages rose just 29% to GBP21,330. The result is that buying a home has become increasingly unaffordable for many people.

To make matters worse, saving for a mortgage has become harder as the amount of deposit needed to get a mortgage has risen by 386%. In 2001 the deposit for a typical 90% mortgage was GBP12,177, corresponding to about nine months’ salary. By 2011, after the financial crisis, banks were generally less willing to lend 90% of the price and the the deposit needed for a typical 75% mortgage had ballooned to GBP59,129, almost three years’ salary.

At the same time the cost of renting has increased, a letting group said today. LSL Property Services plc, which owns a letting agent network that includes national chains Your Move and Reeds Rains, reported that the average rent paid by private tenants in England and Wales had reached a new record high of GBP725 a month in July.

Average rents rose by 1% compared to June and were 2.9% higher than a year ago, fuelled by strong demand for rented accommodation due to the growing number of people unable to get a mortgage.

Housing charity Shelter has called for government action to increase house building in order to address the housing crisis, after official figures released yesterday revealed a 24% decrease in the number of new homes started. Only 21,540 new homes were started by builders in the three months to June 2012, down 24% from the same period a year ago and a 10% decrease from the first three months of the year.

Shelter’s chief executive Campbell Robb said: “With a flatlining construction sector, building significant numbers of new, genuinely affordable homes would create jobs and stimulate the economy. More importantly, it would send a clear message to the millions of people priced out of homeownership or struggling with high housing costs that the government is on their side.”

Ireland’s Petroceltic acquires oil and gas group Melrose Resources

Irish oil and gas explorer and producer Petroceltic International Plc (LON:PCI) has agreed to buy Melrose Resources plc (LON:MRS) in an all-stock deal valuing the British sector player at some GBP165m (USD259.4m/EUR210m), the pair said on Friday.

The combination will create an independent oil and gas company focused on North Africa, the Mediterranean and Black Sea, with a portfolio including production, development and high-impact exploration assets, the companies said.

Under the deal terms, Petroceltic is paying 17.6 new own shares for every Melrose share, with the target to also pay to its shareholders a dividend of GBP0.047 a share.

The merger will give existing Melrose shareholders 46% in the combined company, while Petroceltic’s stockholders will have the other 54%, the companies said.

The enlarged group will have an increased financial flexibility, allowing it to pursue growth through active exploration drilling and participation in the future development of Petroceltic’s Ain Tsila gas development in Algeria.

After the merger, the combined company will seek an additional premium listing in London, which the two firms see as a means to attract investors and funds.

Melrose board, advised by Lambert Energy Advisory, N+1 Brewin and HSBC Holdings Plc (LON:HSBA), deemed the terms of the deal fair to shareholders and plans to recommend them to vote in favour of it at their meeting to be scheduled around 20 September.
The transaction will see Melrose become a private company operating as a fully-owned unit of Petroceltic.

Completion, expected to take place on 10 October, also needs to secure clearance from the Bulgarian Commission on Protection of Competition.

Melrose is an oil and gas exploration, development and production company with interests in Egypt, Bulgaria, Romania, the US, Turkey and France.

IBM seeks acquisitions to strengthen its storage systems offering

International Business Machines Corp (NYSE:IBM) will continue its acquisition streak in an attempt to further enhance its storage system offerings, Bloomberg reported today, quoting Bob Cancilla, IBM’s vice president for storage systems.

Yesterday, the IT major announced it had sealed a definitive deal to buy Texas Memory Systems (TMS), a developer of high-performance flash memory solutions, without revealing the financial terms of the transaction.

Brian Truskowski, IBM’s general manager of Systems Storage and Networking,  said TMS’ strategy and solutions fit well with the company’s Smarter Computing approach to IT by assisting clients in achieving better performance and efficiencies at reduced costs.

Cancilla told the news agency that IBM wants to gather various storage system components by acquiring smaller firms in a drive to deliver a more complete solution than its rivals. According to him, the takeover of TMS was “one of the missing pieces”.

Although the company’s solution is much more comprehensive now, IBM is not done with carrying out such transaction, Cancilla added, without giving any details regarding possible future purchases for competitive reasons.

Once the acquisition of TMS is finalised later this year, IBM could start manufacturing an “all-flash array” storage system that does not use hard drives and thus enables faster performance with reduced power consumption, Bloomberg said.

Thai PTT Exploration starts to delist takeover target Cove Energy

Thai oil and gas explorer PTT Exploration and Production Pcl (PINK:PEXNY), or PTTEP, said on Friday its GBP2.40 (USD3.77/EUR3.05) per share takeover offer for British peer Cove Energy Plc (LON:COV) had remained fully unconditional after meeting all conditions, including the receipt of final nod from the Mozambique government.

By 16 August, PTTEP secured some 94.32% of Cove shares, it said, adding that the offer would stay open for acceptance until further notice. The buyer plans to soon start a compulsory procedure for the remaining stock. As it already owns more than 75% in Cove, PTTEP has asked its British target to apply for the delisting of its shares, it explained.

The bid, valuing Cove at GBP1.22bn, was agreed on 23 May and was extended a few times.
It won the support of Cove’a board as it outmatched the GBP2.20 a share proposal from Royal Dutch Shell plc (LON:RDSA) made in April, resulting in the board withdrawing its support for Shell.

In a comment from May, Cove’s CEO John Craven said the bid represented substantial value for shareholders, while recognising the world-class nature of Cove’s assets in East Africa.

For the buyer, the acquisition allows it to leverage its LNG value chain, in line with the group’s long-term strategic priorities, CEO Tevin Vongvanich said.

PTTEP plans to use existing cash and newly secured debt to finance the takeover, it has said.