The indepen' />

By ELLEN READ

Frucor's independent directors are today expected to reject the takeover offer from French giant Groupe Danone.

The independent valuation of the company, due to be released to shareholders today, is expected to reflect analysts' average valuations of around $2.58 a share.

Danone, the world's biggest water bottler, offered $2.35 a share when it launched a $294 million bid for all of the company last month.

The offer will remain open until December 7.

Since then, Frucor's share price has soared, from $1.88 to a high of $2.47 before closing yesterday at $2.45.

Analysts have suggested that the Danone offer is too low, with the average valuation of the company before the takeover offer sitting at $2.58 per share, though some have since raised their valuations.

Frucor's major shareholder, Pacific Equity Partners, has already accepted the offer for its 38 per cent stake, but it is entitled to receive more money if Danone raises its offer.

Danone's offer is subject to its buying more than 90 per cent of Frucor shares.

Under New Zealand's takeover laws, stakes of between 20 and 50 per cent are not allowed and once a company reaches 90 per cent it can compulsorily acquire the remaining shares.

Shareholders at Frucor's recent annual meeting were lukewarm about the takeover offer, with some saying the company should remain in New Zealand hands.

Frucor's independent directors have been seeking counter-offers to the Danone bid and investment banker Credit Suisse First Boston has been working through a list of potential suitors.

To date Danone has refused to say whether it would settle for less than 90 per cent or increase its offer price.

The company's Asia Pacific vice-president, Simon Israel, flew to Auckland last night and will talk to media today.

He told Dow Jones Newswires last week that he could not say the offer would be the final one.

Frucor manufactures and sells 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 its 100-per-cent-owned subsidiary Griffins Foods.