Kirin has tapped Deutsche Bank (DBKGn.DE) to help defend its turf in a two-way fight for Asia Pacific Breweries (APB) (APBB.SI), sources familiar with the matter said on Tuesday, showing for the first time that the Japanese company will not sit quietly while its rivals move in to wrest control of the maker of Tiger beer.

Last week, companies linked to a Thai billionaire agreed to pay S$3.8 billion ($3.02 billion) to acquire stakes in F&N and its affiliate APB from Singapore bank OCBC. That forced APB shareholder Heineken NV (HEIN.AS) to launch a $6 billion counter-bid for the beermaker.

Kirin, which indirectly owns part of APB through its stake in F&N, could try to block an attempt for control of the Singapore conglomerate, sources said.

"All options are on the table," said one of the sources with direct knowledge of the deal. "As a major shareholder of F&N they have a lot more say."

It was unclear whether Kirin wants to launch a counter-bid for F&N, which analysts have mentioned as a possible break-up candidate. The Singapore conglomerate earned 59 percent of its revenue last year from its food and beverage business and 34 percent from property.

But Kirin, with its near 15 percent stake in F&N, would want to have a say if the battle for F&N leads to a break-up, said the sources, who declined to be identified because they were not authorized to speak to the media.

Kirin and Deutsche Bank declined to comment.

"I'm not convinced that Kirin will go ahead and take such a large amount of debt to get into something that is fairly complicated, given the property assets involved at F&N," said Nigel Muston, an analyst at CLSA Asia-Pacific Markets in Tokyo.

"And that their own Japanese brand beer and soft drinks may not get the sort of exposure they want in Southeast Asia if they can get it," he said.

GOLDMAN SACHS

F&N has hired Goldman Sachs to weigh Heineken's bid for APB, sources said on Monday. The Dutch brewer's bid for APB will expire on Friday.

The tussle for Southeast Asia's biggest beer maker comes amid a wave of industry consolidation and expanding beer sales in emerging markets, although APB's ownership structure makes this among the most complicated assets to buy.

Heineken's proposal last Friday completed a frenetic week for F&N, whose joint venture with the Dutch brewer has a 65 percent controlling stake in APB.

Heineken offered to buy out F&N's interest in APB after OCBC and an affiliated group received a $3 billion bid for their stakes in F&N and APB from companies linked to Thai billionaire and founder of Thai Beverage PCL (TBEV.SI), Charoen Sirivadhanabhakdi.

APB, whose shares surged as much as 18 percent to a record on Monday, were up 0.3 percent on Tuesday. They were still trading below Heineken's offer of S$50.00 a share.

F&N rose 1 percent on Tuesday.

F&N was not immediately available to comment on Goldman's (GS.N) role as its financial adviser, while a spokeswoman for the bank declined to comment.

"There's still some uncertainty as it is not clear how F&N will react to the offer," said Goh Han Peng, an analyst at DMG & Partners Securities.

"If the F&N shareholders do not accept the offer from Heineken, they may come up with a hostile offer for APB, meaning they will go to the minority shareholders. The second way is to go directly to F&N and mount a takeover because shares in APB are very illiquid."

Nomura said if F&N accepts Heineken's offer, it will reap cash proceeds of about S$5.2 billion but lose an important contributor to its earnings.

Without APB, F&N will have a smaller food and beverage business comprising its ASEAN soft drinks and dairies businesses, Nomura said.

But the Singapore conglomerate will have additional cash of S$5.2 billion, or S$3.66 per share, part of which could be paid as a special dividend, according to Nomura. ($1 = 1.2569 Singapore dollars)

(Additional reporting by Eveline Danubrata in SINGAPORE and James Topham in TOKYO; Editing by Michael Flaherty and Ryan Woo)

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