Frucor bid subject to 90 per cent acceptance

Danone Asia Pte Ltd's existing offer of $2.35 is a full price for Frucor Beverages, according to Simon Israel, Managing Director of Danone Asia.

Simon Israel was commenting on the release of the Target Company statement from the Frucor Independent Directors, and the Independent Expert's valuation report from Grant Samuel.

"We are not surprised by the valuation range, as you'd expect to see some alignment with the views of financial analysts, although the bottom of the range is higher than we expected.

"The midpoint of the range is a 60 per cent premium on the average price for the six months prior to our offer, which is unusually high by any standard," he said.

"We are disappointed that our offer, which is already a 41 per cent premium on the average price over the past six months, is not considered reasonable given there's no other bid on the table.

"Since the stock was floated the analysts' valuations have on average been 66 per cent higher than what the market has been prepared to pay.

"The report indicates that since the announcement of our offer, more than 55 per cent of shareholders have either accepted our offer or sold their shares at less than the Grant Samuel valuation range.

"At the close of trade on Friday, the market isn't prepared to bid the low end of the range," he said.

In a statement Danone Asia said the largest Frucor shareholders, representing 38 per cent of the company, accepted the Danone offer the day after it was sent to shareholders.

"The chairman, Simon Pillar, and another director, Ricardo Garbled have also informed Danone yesterday that they have accepted the offer for their personal shareholding."

Simon Israel said there was nothing in the report that changed Dianne's view of the valuation.

"However we are concerned to see the extent of the continuing losses in the UK, the fact the company as a whole is losing money and is behind budget for the four months to October. The report also notes that there is a risk they may not meet their full year forecasts.

"In this context it's unfortunate the report does not substantiate the aggressive earnings forecasts.

"The Report contains a number of assumptions which in Grant Sambal's own words 'speculate' about Dianne's intentions.

"Given we have never met Grant Samuel, they have no knowledge of our intentions, and have not covered all our options, we would advise any shareholder to treat these remarks with caution.

"We will be considering all of our options including letting the current bid lapse if the condition of 90 per cent acceptance is not satisfied," Simon Israel said.