NZ/AUS: Investor's soft drink concerns dampen Frucor share issue
Concern over the prospects for smaller soft-drinks makers and wobbles in global stockmarkets has forced Australian-New Zealand based Frucor to accept a drastically reduced price for its first share issue.Frucor, which makes the V energy drink as well as fruit juice brands like Fresh-up and Just Juice, had been looking for bids of between NZ$1.95 and $2.25 a share but the big financial institutions have offered only $1.50.This values the 50.1% stake, which will start trading on Australia and New Zealand exchanges on Tuesday, at NZ$93.7m compared with $121m at $1.95 a share.Major investors claim they were unwilling to offer higher than $1.50 because of growth concerns. Analysts believe that Frucor may be overstating growth potential outside its core Australasian markets, particularly in the UK where it has just started selling V. Market watchers believe smaller soft-drink makers lack the marketing clout to take on the giant manufacturers - who are expected to invest heavily in the energy drinks sector in the future. Frucor also says the lower price reflects tough market conditions where interest rates are rising and new issues have looked unsteady.But the issue has been a relative success despite the lower price. Frucor was bought out by private investors from the Apple and Pear Board in 1998 for NZ$50m. Now just half the company has sold for twice that.Frucor is forecast to make a profit of NZ$31m this year and $42.5m next year compared with $17.9m and $15.9m in the past two years. David Robertson
Get full access to all content, just $1 for 30 days
A Message From The Editor
just-drinks gives you the widest beverage market coverage.
Paid just-drinks members have unlimited access to all our exclusive content - including 15 years of archives.
I am so confident you will love complete access to our content that today I can offer you 30 days access for $1.
It’s our best ever membership offer – just for you.
Olly Wehring, editor of just-drinks
- AB InBev, SABMiller - Here's what'll happen next
- Is time right for TWE to move for Diageo's wines?
- Is Brown-Forman at the end of the SoCo road?
- Will a sexed-up SABMiller tempt AB InBev?
- Is Brown-Forman doing a Jack Daniel's in Ireland?
- AB InBev makes formal offer for SABMiller
- Diageo secures Xerox Corp CFO as finance head
- Tesco pulls several Carlsberg SKUs in UK
- Diageo makes US$780.5m beer deal with Heineken
- SABMiller formally rejects AB InBev's offer
- The IWSR Duty Free/Travel Retail Summary Report 2015
- Future growth opportunities for global spirits
- Global gin insights - market data, product innovation and consumer trends research
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research