DB ownership changing as Corbans sale proceeds

By Michele Simpson

Friday 11th August 2000

DB Group's majority shareholder is gobbling up more shares in the brewer as it continues to entertain suitors for its $130 million sale of Corbans.

Asia Pacific Breweries has increased its stake in DB Group in the past month to more than 76%, with analysts certain the Singapore-based company will soon look again at taking it over.

Since APBL's failed attempt to take over DB Group earlier this year and delist it from the Stock Exchange it has obtained more shares from its original 60% stake.

Merrill Lynch said to investors in May that APBL could "potentially mount a further takeover attempt at this point."

The sale of Corbans is the last hurdle before APBL launches a bid, one brewing analyst said.

DB Group is understood to have no shortage of contenders interested in its wine division. Pricewaterhouse Coopers valued Corbans at between $130.4 million and $146.7 million at the time of APBL's offer in February.

Merrill Lynch believes shareholders could gain more than $1.30 a share from the sale of Corbans as the group is debt-free.

"Corbans was the only reason people didn't sell. [Shareholders] wanted an increased offer and then APBL called their bluff," one New Zealand brewing analyst said.

In February APBL decided to stage a bid to obtain 100% of the company. APBL is controlled jointly by worldwide Dutch brewer Heineken and Singapore group Fraser & Neave.

Dubbing it a mop-up exercise, APBL offered $2.80 a share plus an 8c dividend to shareholders.

Independent directors Sir Colin Maiden and David Sadler advised shareholders to reject the offer after the Pricewaterhouse Coopers report pipped the share price value at between $3.19 and $3.61.

The share price this week was stuck at $3.

APBL refused to increase its offer and has now sunk back into its role as majority shareholder after gaining an additional stake. It has still been buying share packets. Its last 2% buy in June through law firm Rudd Watts & Stone took its total to 76.5%.

A spokeswoman from SG Corporate Finance Advisory, the Melbourne company working with APBL, said there had been no bids from the client to buy up large chunks of shares.

"The point is, shareholders held out because of the value in Corbans - once that goes there is no value in brewing," an analyst said.

DB Group's interim net profit before tax for the period ended March 31, 2000 was $15.2 million - an increase of 11.5% on the same period last year.

DB Group has virtually disappeared off market watchers' radar owing to such a large share being held by APBL.

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