DB set to drop from exchange

By IRENE CHAPPLE


One of New Zealand's oldest listed companies, DB Breweries, is set to disappear from the stock exchange, after its Singapore-based parent launched a $110 million takeover.

Asia Pacific Breweries' deal is expected to succeed within weeks.

DB, which produces brands such as Tui, Export Gold and Monteiths, was established in 1929 and listed in 1930. It will be delisted when - no-one is using the term "if" - Asia Pacific takes full control.

Pre-bid negotiations between Asia Pacific and DB's major shareholders have already mopped up a large chunk of the 23.09 per cent not owned by Asia Pacific.

Weekend discussions guaranteed the acceptance of large shareholders, including the Accident Compensation Corporation, which holds 8 per cent. By the end of yesterday, Asia Pacific claimed ownership of 87.1 per cent.

It is expected to reach the 90 per cent threshold for compulsory acquisition soon after the takeover offer is mailed to shareholders on August 9. It closes on September 6.

Takeover bids usually attract a share price premium of about 15 per cent but Asia Pacific priced its offer at $9.50 - 20.25 per cent above the previous trade of $7.90.

The offer is more than three times higher than when Asia Pacific previously bid for control in 2000.

It is unconditional and has a sweetener: Accept the offer within five days and receive payment within seven.

The bid will cost Asia Pacific $110 million and values DB at about $479 million.

The share-price shot up 18.98 per cent by the end of the day to $9.40, an all-time high. They have traded between $6.80 and $9 during the past year.

Both parties were quiet on the news yesterday - DB managing director Brian Blake was in meetings all day while Asia Pacific fended off queries to David Williams, of adviser Mariner Corporate Finance.

Williams, an Australian, had set up shop at MinterEllison's offices in Auckland after spending the day convincing New Zealand shareholders to sell.

He hand-delivered the takeover bid to Blake yesterday morning and said there was little surprise: "He was fine."

Williams said DB was a well-managed company and there would be no change to the board or the New Zealand structure. Changes "are not even on the radar ... it is business as usual".

The stock's liquidity sat around just 15 per cent before the bid and Asia Pacific's move had been flagged for some time.

Williams said the premium was to ensure a rapid and clean takeover.

Asia Pacific's announcement to the stock exchange said DB's capital expenditure requirements "can be met without the need to raise capital on the NZX, thereby making a stock exchange listing of DB less relevant".

It said the offer was an "excellent opportunity" to sell their shares.

The company will delist once Asia Pacific, which is majority owned by a joint venture between Heineken and Fraser and Neave, has full control.

The full takeover will close a chapter in the 75-year-old company's history that began when Asia Pacific bought into DB from Brierleys in the early 1990s.

It bid for control in 2000, and paid $2.80 a share to raise its stake from 58 per cent to almost 77 per cent. The company has since undergone major restructuring.