* Overseas Union says it won't improve S$9.08-per-share offer
* Raising price unattractive as Singapore cools property mkt-Overseas Union
* Charoen's last offer at S$9.55, Thais own 42.5 pct of F&N
* F&N shares fall to match offer; ThaiBev, Overseas Union rise (Adds share price, Charoen's plan, analyst quotes)
By Eveline Danubrata and Saeed Azhar
SINGAPORE, Jan 22 (Reuters) - Thailand's third-richest man is set to take control of Fraser and Neave Ltd (F&N) in Southeast Asia's biggest-ever acquisition after a group led by an Indonesian tycoon bowed out of a two-month bidding war for the Singapore drinks and property company.
The group led by Stephen Riady's Overseas Union Enterprise Ltd threw in the towel on Monday after Thailand's TCC Assets Ltd, headed by billionaire Charoen Sirivadhanabhakdi, raised its takeover offer for F&N. At stake is F&N's real estate portfolio worth more than S$8 billion ($6.52 billion) and soft drinks, dairy and publishing businesses.
Charoen currently owns 42.5 percent of F&N, held through TCC Assets and Thai Beverage PCL. His S$9.55-a-share offer last week for F&N stock that he does not already own values the Singapore conglomerate at around S$13.75 billion ($11.2 billion). F&N shareholders have until early next month to accept or reject the offer.
"Once its offer becomes unconditional, we are likely to see TCC move to integrate its F&B (food and beverage) operations with F&N's. In addition, it will also look to leverage F&N's regional and global property franchise," said Jit Soon Lim, Nomura's head of equity research for Southeast Asia.
Lim added that Charoen may sell F&N's printing and publishing business, which he estimated to be worth around S$320 million.
Charoen's interest in F&N's assets was first made public when his companies became F&N shareholders in July last year and sought to purchase F&N's stake in Tiger Beer maker Asia Pacific Breweries Ltd. But he lost that battle when F&N sold the stake to Dutch brewing giant Heineken NV for S$5.6 billion in September.
The self-made billionaire, who is a son of a Bangkok street vendor, quickly followed up with a S$8.88-a-share offer for the rest of F&N, with the Singapore group still deemed an attractive asset.
F&N is the leader in the soft drinks markets in Malaysia and Singapore, with a 31.3 percent and 21.4 percent market share, respectively, according to research firm Euromonitor. It also has a 55 percent stake in Myanmar Brewery Ltd, a joint venture that produces Myanmar Beer, the Southeast Asian country's best-selling beer.
Analysts say Charoen is likely to tap F&N's network in Singapore and Malaysia to distribute Chang Beer, brewed by Thai Beverage, as well as spirits, energy drinks and instant coffee. In Thailand, where he already has an edge, Charoen may in turn market F&N's brands.
Charoen, which already has a sprawling property empire under TCC Land, initially bought a 22 percent stake from Singapore's OCBC Group in July at S$8.88 a share. He has forked out around S$5.5 billion to build his stake in F&N to 42.5 percent.
The billionaire will have to cough up around S$7.9 billion for the remaining F&N shares that he does not own, based on his offer price of S$9.55 a share. To finance that, the Thais had previously lined up loans of S$11.8 billion, Reuters Basis Point reported.
On Tuesday, F&N shares fell 2 percent to match Charoen's offer price, while Thai Beverage rose as much as 4.5 percent to a record in Singapore trading. Overseas Union was up more than 2 percent.
Overseas Union said after market close on Monday that it decided not to revise its offer of S$9.08 a share as it would have had to raise the price significantly to gain control of more than 50 percent of the 130-year-old company.
Such a move was no longer attractive after recent measures taken by the Singapore government to cool the city-state's property market, Overseas Union said, adding that it will explore and pursue other acquisitions.
The Singapore government this month imposed a higher stamp duty on foreign buyers, a new levy on sellers of industrial property and a limit on loan sizes. As a percentage of home sales, buying by foreigners in Singapore declined to just over 6 percent last year from 18 percent in 2011, Citigroup said in a report.
F&N's second-biggest shareholder, Kirin Holdings Co Ltd , had offered to buy F&N's food and beverage business for S$2.7 billion had the Overseas Union group's bid been successful. The Japanese brewer owns a stake of around 14.8 percent in F&N.
With Charoen in control, he may not cede the F&N business to Kirin, which competes with Chang Beer. Kirin produces beer, wine, soft drinks and dairy products. But analysts do not rule out a strategic partnership between the two.
A Kirin spokeswoman said no decision has been made, when asked about Kirin's plans.
Kirin is looking at a 47 percent profit, or nearly S$700 million, after acquiring its F&N stake for S$6.50 a share from Singapore state investor Temasek Holdings Pvt Ltd in 2010.
Shareholders of F&N have until Feb. 4 to accept or reject Charoen's S$9.55-a-share offer.
F&N's independent financial advisor (IFA) JP Morgan previously said its sum-of-the-parts valuation is S$8.58 to S$11.56 per share.
A F&N spokeswoman said its independent directors will evaluate TCC Assets' revised offer as advised by its IFA and make their recommendations to shareholders in due course.
If Charoen wins, F&N will have to pay a break fee of up to S$50 million to the Overseas Union group.
Charoen, whom Forbes says is worth $6.2 billion, had 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.
Singapore's securities watchdog, Securities Industry Council, intervened last week by calling an unprecedented auction on Monday to end the protracted takeover battle between the two tycoons.
The auction was triggered because neither bidder declared a final offer by a deadline on Sunday set by the council.
Charoen's advisors are Morgan Stanley, DBS Bank Ltd and United Overseas Bank Ltd. The Overseas Union group was advised by Credit Suisse, Bank of America Merrill Lynch and CIMB. ($1 = 1.2283 Singapore dollars) (Additional reporting by Prakash Chakravarti of IFR and Charmian Kok in SINGAPORE; Editing by Ryan Woo)