Frucor shares soar as Danone seizes the day

By ELLEN READ

Foreign ownership could be on the cards for another successful local company after the takeover offer by France's Groupe Danone for Frucor Beverages.

Danone is offering $2.35 a share for 100 per cent of Frucor, valuing the company at $294 million.

Frucor shares rose more than 26 per cent yesterday, closing at $2.38.

"We've made a formal response to the New Zealand Stock Exchange and the company has appointed an independent subcommittee of the board to handle the process," said Frucor managing director Mark Cowsill yesterday.

He would not comment on whether the company had expected the offer.

Danone's Asia-Pacific executive vice-president, Simon Israel, said representatives met the Frucor board last week. He said the board indicated it was open to an offer.

The French company said it had an option to buy 19.99 per cent of Frucor from 31 per cent shareholder Bain Capital.

Danone said its Frucor bid represented a 39 per cent premium over the weighted average share price of Frucor on the Stock Exchange for the past three months, a 26 per cent premium over the weighted average price at which Frucor had traded since its IPO in June last year, and a 57 per cent premium over the IPO price.

Frucor manufactures and sells the "V" energy drink as well as bottled water, soft drinks, fruit juices and new-age drinks in New Zealand, Australia, South Africa and Britain.

It made a net profit of $11.7 million for the June year after lowering its profit expectations because of problems launching "V" in Britain.

The company listed in June last year at $1.54 after the shares were issued at $1.50 each.

Groupe Danone is a multinational food and beverages company, based in Paris and listed on the Paris, London, Brussels, Swiss and New York Stock Exchanges.

It has been an investor in New Zealand since 1990 through 100 per cent-owned subsidiary Griffin's Foods.

The offer is subject to Danone buying more than 90 per cent of Frucor shares.

Danone expects to send an offer to Frucor shareholders shortly. Under New Zealand's takeovers code, this cannot be done for 14 days.

Mr Israel said Danone did not plan any big changes to Frucor if its bid was successful.

"This step enables us to develop our presence in the beverage segment in Australasia and to gain exposure to the promising energy drink segment," he said.

He would not comment on whether Danone would consider a smaller stake or higher bid.

Brokers said yesterday that because Frucor's share price closed above the offer price, the market thought that a rival offer or an increased price from Danone was possible.

Last week, business magazine Forbes named Frucor one of the world's top 20 best small businesses, chosen from more than 20,000 companies.