Frucor investors defiant

By ELLEN READ markets writer

Minority shareholders in Frucor have denounced the takeover bid from France's Groupe Danone, saying at yesterday's annual meeting that they want the firm to remain New Zealand-owned.

But they may have little choice. Danone has a hold on a crucial 19.9 per cent stake in the company and is intent on gaining full ownership.

Majority shareholder Bain Pacific Associates, with 38 per cent, has granted Danone an option over the 19.9 per cent stake.

Danone's Asia Pacific vice-president, Simon Israel, has declined to comment on whether the company would settle for less than 100 per cent of Frucor, preferring to wait until the independent appraisal report on its bid is released in a fortnight.

But if other bids were forthcoming, Danone's option over the Bain Pacific stake could be pivotal in repelling them.

While declining to comment on who the rival bidders might be, Frucor director Ian Donald, chairman of the independent directors' committee formed to advise on the Danone bid, advised shareholders to defer accepting the offer in case a better one emerged.

Danone's offer will be posted to shareholders next week and will close at the earliest in the first week of next month.

Frucor chairman Simon Pillar told the meeting that results for the current financial year were slightly ahead of a year ago, buoyed by a strong performance last month.

Managing director Mark Cowsill said Frucor's outlook was promising, with stronger revenue and growth expected over the balance of the year.

"All three geographies are anticipated to deliver improved results in 2002," he said.

Danone, the world's biggest water bottler, launched a $294 million bid for Frucor last month, offering $2.35 a share for all of the company.

Since then, Frucor's share price has soared, from $1.88 to a high of $2.47 yesterday before closing at $2.42, with analysts suggesting Danone's offer is too low.

The independent directors are seeking counter-offers and investment bankers Credit Suisse First Boston are working through a list of potential suitors, mainly overseas beverage companies.