AS THE old stock market saying goes - somewhere, someone is making money.

For some traders, that "somewhere" may well be in our own backyard where cheap money is triggering a host of takeovers of companies with valuable businesses that generate lots of cash and profits.

Take the high-stake game being played out at Fraser & Neave - a staid conglomerate with diverse interests such as beer, beverage, property and printing - which rarely catches the investing public's attention until now.

With bankers queuing up to fund his acquisitive spree, Thai billionaire Charoen Sirivadhanabhakdi seized a 22 per cent stake in F&N one month ago in a surprise attack costing a cool $2.8 billion. At the same time, a company owned by his son-in-law had bought an 8.6 per cent stake in Asia Pacific Breweries (APB), the brewer controlled by F&N, for about $1 billion.

It prompted a massive counter-attack from Heineken, which already holds 42 per cent of APB, as it offered $50 a share for F&N's entire 39 per cent stake in APB - a deal which would cost it an eye-popping $5.1 billion if it goes through.

Then as subsequent manoeuvres from Mr Charoen threatened to derail its offensive, the Dutch brewer was forced to up its offer last Saturday to $53 a share for F&N's APB stake, which would raise its outlay to $5.4 billion.

For traders watching the unfolding saga, betting on how the bidding war pans out may turn out to be very profitable. Since ThaiBev's entry into F&N last month, the counter had jumped 13.5 per cent, while APB had surged 46.5 per cent.

But F&N is not the only takeover drama in town.

Early this month, another old low-key consumer play - Cerebos Pacific - found itself the subject of a takeover by its major shareholder Suntory Beverage & Food Asia. The Japanese whisky maker offered to buy out the rest of Cerebos shares at a 22.7 per cent premium to pre-takeover price.

True, the market may not be buoyant and the benchmark Straits Times Index may be stuck around the 3,000-point level, gaining 0.2 per cent, to 3,062.11 last week. The smouldering euro zone debt crisis and the increasingly bitter run-up to the US presidential elections in November are a drag on market sentiment.

But there is a beehive of activities behind the scene, as corporate bosses plot to take rivals out of action, or cement the control on the businesses they manage, as they are offered huge sums of cheap money to make fresh acquisitions.

For traders, the best way to make money may not be to chase F&N or Cerebos Pacific whose prices have already run a sharp run-up.

As buying houses and making bets on high-yielding defensive plays such as real estate investment trusts go out of fashion, one bet may be to hunt for old conglomerates with valuable businesses that may be ripe for the picking.

In the previous waves of mergers and acquisitions which hit the market after the Asian financial crisis more than a decade ago, a host of contract manufacturers such as NatSteel Electronics, Omni Industries and JIT disappeared into the pages of history.

There was also a wave of consolidation among the banks which saw United Overseas Bank swallowing up Overseas Union Bank and OCBC Bank taking Keppel Capital into its fold.

With no end to the flow of cheap money in sight, a new chapter of corporate takeovers may be about to start. What traders need to do is to position themselves in the right spot, as the action begins.

engyeow@sph.com.sg