Frucor share float tipped

By DITA DE BONI

New Zealand's second-largest non-alcoholic cold drink producer, Frucor Beverages, is expected to announce a transtasman initial public offering today.

A news conference to announce the share offer is being videocast from Australia at midday, indicating the company has opted to take advantage of a more robust capital market in its largest sales area.

It is understood Frucor aims to raise between $120-$150 million, corresponding to a price of between 195c and 225c for the 62.6 million shares on offer.

At 195c a share, the newly floated company would have a market capitalisation of more than $240m.

Frucor is expected to list on June 13.

It is not yet clear exactly what projects the new capital will be used for. The company has just one significant product in the Australian market.

Its guarana-based energy drink, V, which has had heady success across the Tasman, was launched in Australia in February 1999 and now has more than 60 per cent of the energy drinks market there.

V has also recently been introduced to Britain, aiming to upset market leader Red Bull.

The bulk of Frucor's turnover in V - estimated to be over $100m in the coming year - comes from Australia.

The total Australian market for energy drinks is worth around $200 million, four times that of the New Zealand market.

In New Zealand, the company produces Just Juice, Fresh-Up, and NZ Natural mineral water.

It also distributes international brands such as Lucozade and Ribena, and bought the Pepsi Cola Bottlers New Zealand business from Lion Nathan in October 1999.

Frucor began life as a fruit juice manufacturer. It was sold by the now-defunct Apple and Pear Marketing Board to a consortium of international bankers for $50 million in 1998.

New Zealand investment bankers Fyers Wickham led the consortium, with equity sponsors United States investment firm Bain Capital and Sydney-based Pacific Equity Partners also involved.