By Phil Boeyen, ShareChat Business News Editor
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Wednesday 5th December 2001 |
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Danone is sending a letter to Frucor shareholders advising them that its takeover offer will now run till January 4, 2002. The previous cut off date was December 21.
In the letter the French food and beverage giant explains why it is sticking to its guns over the offer price.
"We believe that our existing offer provides you with a full price for your Frucor shares, and we attach some recent commentary which gives you an additional and independent perspective on our offer," Danone says.
"We encourage you to accept our offer as soon as possible. This will enable us to declare our offer unconditional more quickly, meaning you will receive $2.35 per share in the shortest possible time frame."
Shareholders have been advised by Frucor's independent directors to reject the Danone offer because an appraisal report says the bid price is neither fair nor reasonable, particularly in light of the synergy benefits Danone stands to gain from the purchase.
Danone is understood to have been canvassing a number of Frucor shareholders to find out why they have not yet accepted its bid, but the latest extension shows that it is happier to draw out the offer time period than raise the price.
The company is again warning Frucor shareholders that if insufficient shareholders accept the bid, it may lapse.
"In the absence of an alternative bid, we believe the Frucor's share price is likely to trade below the offer price of $2.35," Danone says.
Grant Samuel has valued Frucor's shares at between $2.53 and $2.96 per share. If Danone was to bring its offer up to the minimum appraisal price it would need to stump up with a further $22.5 million.
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