By Phil Boeyen, ShareChat Business News Editor
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Friday 16th November 2001 |
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An appraisal report into Danone's takeover bid was released to the market early Friday and claimed the price being offered is neither fair nor reasonable. The Grant Samuel report assesses Frucor shares in the range of $2.53-$2.96 with a midpoint of $2.74.
Danone Asia's managing director, Simon Israel, says the company is not surprised by the valuation range "as you'd expect to see some alignment with the views of financial analysts."
However Mr Israel says the bottom of the range is higher than expected and the midpoint, at 60% above the average price for the six months prior to the offer, is unusually high.
"We are disappointed that our offer, which is already a 41% premium on the average price over the past six months, is not considered reasonable given there's no other bid on the table. Since the stock was floated the analysts' valuations have on average been 66% higher than what the market has been prepared to pay."
Mr Israel says there is nothing in the report that changes Danone's view of the valuation.
"However we are concerned to see the extent of the continuing losses in the UK, the fact the company as a whole is losing money and is behind budget for the four months to October.
"The report also notes that there is a risk they may not meet their full year forecasts. In this context it's unfortunate the report does not substantiate the aggressive earnings forecasts."
Danone says it will be considering all its options including letting the current bid lapse if the condition of 90% acceptance is not satisfied.
Mr Israel says $2.35 is a full price for Frucor but does not say whether or not it is the company's final bid. Frucor shares closed up 5 cents at $2.50 on Friday, below the bottom of the Grant Samuel valuation range.
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