* Charoen offered $7.2 bln to take over whole of F&N
* F&N advisor says Thai offer not compelling though fair -sources
* Thai Beverage shares close 5 pct higher
(Adds F&N advisor, updates share prices)
By Eveline Danubrata
SINGAPORE, Oct 10 (Reuters) - Singapore conglomerate Fraserand Neave Ltd (F&N) , the takeover target of a Thaitycoon, said it had rebuffed a S$1.4 billion ($1.14 billion) bidfor its hospitality and serviced residence business.
Overseas Union Enterprise Ltd , backed byIndonesia's Lippo Group, made a bid for the F&N unit, twosources with knowledge of the matter said, declining to beidentified because the information is confidential.
The bid came as F&N's board is weighing Thai billionaireCharoen Sirivadhanabhakdi's $7.2 billion offer to take over thewhole of the Singapore conglomerate.
Sources said J.P.Morgan, the financial advisor to F&N'sindependent directors, had called the Thai offer fair though notcompelling, although it was not clear how the lukewarm ratingwould influence the board.
"The bid could reinforce the idea that F&N's assets are notfully appreciated, at least in the offer price," said Jit SoonLim, an analyst at Nomura, who has a 'buy' rating and a S$10.19target price on F&N stock.
"F&N has developed over many years a good brand franchisefor its serviced residence business and they have underlyingassets as well."
F&N will not respond to the S$1.4 billion offer for itshospitality and serviced residence business, the conglomeratesaid in a stock filing early on Wednesday, without identifyingthe bidder.
F&N, which also has soft drinks, dairy and publishingsegments, said the business is an integral part of its propertyarm and it is still considering Charoen's takeover offer.
The Singapore conglomerate agreed last month to sell its 40percent stake in Tiger beer maker Asia Pacific Breweries
to Heineken NV .
Overseas Union Enterprise, a Singapore hotel and propertyfirm, declined to comment.
Shares of Thai Beverage PCL , controlled byCharoen, closed 5.1 percent higher on Wednesday after F&N saidit had received the bid. F&N shares closed up 0.6 percent atS$8.93.
Companies linked to Charoen are collectively F&N's largestshareholder with a 33.5 percent stake. Japan's Kirin Holdings CoLtd is F&N's second-biggest with nearly 15 percent.
In the last few weeks, units of British insurer PrudentialPLC have pared their F&N stake to about 4.8 percent from around7.8 percent.
F&N's property portfolio has attracted the interest ofBlackstone Group LP and global property companies,sources have told Reuters, while the beverage business couldappeal to potential suitors such as Coca-Cola Co andKirin.
($1 = 1.2305 Singapore dollars)
(Additional reporting by Charmian Kok; Editing by Ryan Woo)
Keywords: FRASERANDNEAVE OUE/