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Danone bids $123M for NZ's Frucor

Danone chairman Franck Riboud expects earnings growth of close to 10 percent in the 2001 second half  

By CNN's Geoff Hiscock, Asia business editor

SYDNEY, Australia (CNN) -- French food and beverage group Danone launched a $123 million (NZ$294 million) full takeover bid Wednesday for New Zealand's largest juice company Frucor Beverages.

Danone said the offer, at NZ$2.35 a share, was 39 percent above Frucor's average share price over the past three months on the New Zealand Stock Exchange.

It is also offering NZ$1.31 for each NZ$1.00 of convertible notes.

The offer sent Frucor shares soaring on the New Zealand and Australian stockmarkets. Frucor closed up 27 percent in Wellington at NZ$2.38, and up 35 percent in Sydney at A$2.04.

Danone, best known for its Evian water, said it wanted to develop its Australasian presence and enter the "promising" energy drink segment.

One of the 'world's best small companies'

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Frucor, named one of the world's 20 best small companies by Forbes magazine earlier this month, sells V energy drink and Fresh-Up fruit juice in New Zealand, Australia, South Africa and the U.K.

It bought the Australian-based Spring Valley distribution business in January this year.

Danone's offer continues a run of recent takeovers in New Zealand, exemplified by U.K.-based Allied Domecq's successful bid for winemaker Montana in August after a lengthy battle with brewing group Lion Nathan.

Earlier this month U.S. utility Edison Mission Energy offered $450 million (NZ$1 billion) to move to full ownership of its New Zealand power and gas subsidiary Contact Energy.

Danone is making its offer through its Singapore-based Asia-Pacific holding company, Danone Asia.

Danone already active in Asia-Pacific

In a statement to the NZSE Wednesday, Frucor said Danone was a market leader in biscuits and water in the region.

It said Danone was the largest beverage company in China and Indonesia, and had been an investor in New Zealand since 1990 through its subsidiary Griffin's Foods.

The offer is subject to a 90 percent acceptance.

Frucor's U.S.-based majority shareholder Bain Pacific Associates, which holds 31 percent of the company, has entered into a conditional option agreement with Danone over a 19.9 percent stake, Frucor said.

Frucor stopped short of recommending acceptance of the offer until it receives an independent adviser's report.

But Frucor director Graham Evans said in a statement that Danone was a "highly respected international company which would certainly assist Frucor's expansion offshore through its distribution channels".

In a statement on October 10, Danone said it was confident of meeting its 2001 sales target of between 5 and 7 percent growth. Sales in 2000 were 14.3 billion euros ($12.7 billion).

Danone chairman Franck Riboud said earnings per share growth in the second half of 2001 should be close to 10 percent, compared to 6 percent in the first half.


• Danone Group
• Frucor Beverages

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