Frucor predicts profit jump

By Nick Stride

Friday 2nd November 2001

Shareholders in Frucor Beverages yesterday gave the $2.35 takeover bid from French giant Danone a verbal thumbs-down as the company predicted further strong growth this year.

Managing director Mark Cowsill told the annual meeting September first quarter revenue and earnings were slightly ahead of the same period last year.

The company expected strong growth over the balance of the year, he said.

Several shareholders told directors, to general applause, that they were tired of having good companies bought out from under them and would prefer Frucor to find strategic partners to help further its expansion aims.

Mr Cowsill said distribution of Frucor's V beverage in Britain had topped 50% of outlets, justifying the summer marketing campaign.

V was now the clear number two in the British cold beverage market behind Red Bull and was the only significant brand to have improved its position over the season.

Management believed it now had 8-10% market share.

The market had turned down for the first time after Red Bull decreased its marketing spend by over half, Mr Cowsill said.

Frucor's independent directors have appointed Credit Suisse First Boston to solicit a takeover bid to compete with Danone's.

They expect to make a recommendation to shareholders on the Danone bid by November 13, when Grant Samuel's appraisal report is completed.

Danone has a call option over 19.9% of the 31% held by major shareholder Bain Capital.

Chairman Simon Pillar said Bain would be able, if it tendered its shares within three business days of the offer going live, to benefit from any increase in Danone's offered price.

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