By Phil Boeyen, ShareChat Business News Editor
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Thursday 6th December 2001 |
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French food company Danone yesterday extended the time period for its offer by another two weeks until January 4, 2002. The original offer was due to close on December 7 but was later changed to December 21.
Danone believes its offer for the beverage company is a full one but Frucor's committee of independent directors say the offer is below the appraisal range of $2.53 to $2.96 per share and that the average of broker research analyst valuations is $2.75 per share.
"This average includes the UBS Warburg valuation referenced by Danone which is the lowest of the analysts' valuations. Omitting the UBS Warburg valuation, the average of analysts' valuations increases to $2.93 per share," the committee says.
"Expressions of interest continue to be received from potential purchasers and the independent directors have therefore still not ruled out a competing bid emerging."
In its most recent letter to shareholders Danone spokesman Simon Israel pointed out that the possibility of a competing bid is critical information for the market and, especially, Frucor shareholders.
"Accordingly, over two weeks ago, we requested that the independent directors make a formal statement to the market on the status of any discussions with alternative bidders. To date, we have received no response to this request.
"It is now more than 40 days since we first announced our offer for Frucor, and no alternative bid has emerged."
Danone says that since the appraisal report on Frucor was published its share price has continued to trade downwards, closing at $2.37 on 3 December.
"This is marginally above our offer price but well below the low end of the Grant Samuel valuation range. It highlights again the reality gap that continues to exist between what Grant Samuel concludes and what the market is prepared to pay," Mr Israel says.
However the Frucor independent directors are not being swayed by the Danone arguments and note that the French suitor has been unsuccessful in attracting any significant acceptances beyond the 37.6% already tendered by Bain Capital and associated parties.
At the same time they are reminding shareholders that the company's balance sheet is sound, with sales of market leading energy drink V continuing to strengthen in core Australasian markets.
"We continue to recommend that you do not accept the offer. We also reiterate you will not be disadvantaged by deferring your decision on whether or not to accept the Danone offer until closer to January 4, 2002," the directors have told shareholders.
"We will continue to keep you informed and in view of the impending holiday period will communicate with you again by December 21, 2001, the latest date by which Danone can change or further extend the period for acceptances of its offer."
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