Heineken bids to quench thirst for DB

By GEOFF SENESCALL

DB Group's majority shareholder is looking to soak up the rest of the local brewer through a 288c a share takeover bid.

Having first sampled DB in 1991, Dutch brewer Heineken, through its Asia Pacific Breweries subsidiary, said yesterday that it wanted to lift its 58.4 per cent holding to 100 per cent.

The advisers to the deal, SG Corporate Finance Advisory, said the offer was unconditional and also included the 8c a share dividend payable on February 11 - valuing DB at $282.3 million.

The bid represented a 20 per cent premium to DB's closing price yesterday of 240c a share.

Analysts were mixed on how minority shareholders would react to the offer, to be mailed out on February 23 and to close on March 27.

One said that it was not overly generous. On a break-up basis, a price of beyond 300c could be reached. But given Heineken already held control, it was the only game in town.

The opposing view was that the prospects for the group were flat. While shareholders might be giving up growth in DB's wine division, Corbans, they would have to wait several years before realising any benefit from its expansion plans.

Outside Heineken, DB's register is wide open with no large shareholders to target. It has 11,000 shareholders, including seven institutions.

SG Corporate Finance Advisory said ownership of DB had been an issue for some time. However, there was no particular reason for the timing other than to remove the speculation about Heineken's intentions.

There were no plans on the table to break the group up.

However, brewing analyst for Merrill Lynch, Warren Doak, noted that Heineken had no other wine interests internationally.

"Now that the group has been streamlined into two business [beer and wine], one would think the future of the wine operation in the group was doubtful," he said.

Corbans - with 27 per cent share of the domestic wine market and 18 per cent of the supermarket bottled wine sales - could easily be floated or sold.

Mr Doak predicted the proceeds of that sale would be used for expansion into Australia.

Asia Pacific Breweries - owned jointly by Heineken and Singapore-based Fraser and Neave - produces and markets two of the world's best known beer brands, Heineken and Tiger, throughout Asia.

Unlike other major markets, its presence in Australia is limited. Heineken beer has only 1 per cent market share in Australia and less than 10 per cent of the premium beer market.

Heineken is believed to be unhappy about this and wants to take control of distribution to drive the brand.

Heineken had been rumoured to be interested in buying Australia's largest brewer, Carlton & United Breweries. However, it now wants to go it alone.

DB's leading brands include DB Draught, Export Gold and Heineken in beers and Corbans, Stoneleigh and Longridge wines.