UPDATE 1-F&N rebuffs $1.1 bln bid for hospitality, residence unit

* Charoen offered $7.2 bln to take over whole of F&N

* F&N board set to make recommendation on Thursday on Thaioffer

* Thai Beverage shares jump 11.5 pct

(Adds analyst comments, share price, details)

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 may still perplex Thai billionaire CharoenSirivadhanabhakdi's $7.2 billion offer to take over the whole ofthe Singapore conglomerate. F&N's board is due to make itsrecommendation to shareholders on Thursday on whether to acceptor reject the Thai offer.

"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.

THAIBEV SHARES

Shares of Thai Beverage PCL , controlled byCharoen, surged as much as 11.5 percent after F&N said it hadreceived a bid for its hospitality and serviced residencebusiness. F&N shares were up 0.6 percent at S$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)

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Keywords: FRASERANDNEAVE OUE/