Forum Archive Index - January 2002

["Phil Boeyen" <pboeyen@sharechat.co.nz>]

Hi Andrew

 

Hardly surprising that Bain is urging others to accept the Danone bid given the profit they will make - I think they bought their stake for 50 cents a share and will lose out if the takeover falls over, as looks increasingly likely.

 

Danone has played up the fact that a number of arbitrageurs bought into the stock hoping that Danone would increase the price, but I guess are now selling out as the clock ticks.  Personally, the harping on about alternative bids by Frucor's independent directors has been a bit annoying given nothing has turned up.

 

Without doubt Frucor was hyped in 2000 on V's UK potential and I found it interesting when Frucor said late last year that they do need a partner with deeper pockets to build both the energy drink market in the UK and V's share. 

It would seem some companies have been kicking Frucor's tyres and maybe when the Danone bid is out of the way there will be the chance for some stronger "partnership's" - maybe Frucor selling a half-share in the V business alone, for example?

 

Regards, Phil

(hold FRU)

 

----- Original Message -----

From: andrew cottingham

To: sharechat@sharechat.co.nz

Sent: Monday, January 07, 2002 8:45 AM

Subject: [sharechat] Frucor

Is there anyone out there still holding Frucor ??

Any opinions ?

 

 

This report is on Stuff this morning http://www.stuff.co.nz/inl/index/0,1008,1061143a13,FF.html

 

Frucor major shareholder Bain Capital has urged other shareholders to accept a takeover offer from French drinks giant Danone.

Failure to do so would have a significant negative impact on the Frucor share price, Bain Capital managing director Joe Pretlow said yesterday.

Danone is offering $2.35 a share, conditional of receiving 90 per cent acceptance by the close date of January 18.

The offer has been extended three times since the first bid in October, but the offer price has remained the same.

Danone has indicated it would not extend the offer again. The deadline for any extension announcement was January 4.

Bain Pacific and associates, an affiliate of Bain Capital, accepted the Danone offer for their combined 38 per cent stake in October.

However, Frucor's independent directors have advised shareholders not to sell because the offer was too low, according to appraisal by valuers Grant Samuel, who valued the shares between $2.35 and $2.96.

Independent directors' chairman Ian Donald said before Christmas that expressions of interest were still being received for a counter bid to Danone.

Mr Pretlow said yesterday that the offer was attractive, "particularly in the absence of a higher offer". He said that if the Danone offer did not succeed, it would have a negative effect.

"Danone's bid offers a significant premium to the weighted average trading price of Frucor shares for the six months prior to the offer, which was $1.67.

"If the offer lapses, in all probability, Frucor's share price will fall precipitously and we believe will remain well below the current bid price for the foreseable future," Mr Pretlow said.

In addition to the resulting selling pressure if the bid failed, Bain Pacific and associates' share overhang would suppress the price, he said.

"I don't think adequate consideration has been given to this by the advisers to the independent committee."

Analysts have said the share price was likely to fall to $1.80 if Danone walked away.

Danone is also making an offer of about $5.4 million for convertible notes held by Frucor staff.

At the time of making the bid Danone said it was attracted to Frucor by its "spirit of adventure".

Frucor will disappear from the New Zealand sharemarket if Danone gains 100 per cent.