PHILIPPINES: San Miguel Corporation Announces Takeover Bid for J Boag & Son
San Miguel will offer A$1.65 cash consideration for each ordinary share in J Boag & Son, valuing the company at approximately A$92 million (US$55 million).
San Miguel will also bid for all the outstanding options over J Boag & Son shares at commensurate prices and shares issued pursuant to the exercise of those options.
San Miguel believes that its offer is highly attractive and reflects full and fair value to J Boag & Son shareholders. The offer price represents a premium of 60.2% to J Boag & Son's closing share price of A$1.03 on Friday April 14, 2000.
In addition, it represents a premium of:
- 74% to J Boag & Son's volume weighted average share price of A$0.95 for the 1 month period prior to April 14, 2000; and
- 81% to J Boag & Son's volume weighted average share price of A$0.91 for the 3 month period prior to April 14, 2000.
San Miguel's offer is subject to the following conditions:
- (a) San Miguel acquiring voting power over at least 50.1% (on a fully diluted basis) in J Boag & Son;
- (b) Foreign Investment Review Board ("FIRB") approval;
- (c) No material adverse change occurring in the business, financial or trading position or assets or liabilities of J Boag & Son; and
- (d) Non occurrence of the events in section 652C(1) and 652C(2) (formerly referred to as "prescribed occurrences") other than:
any issue or grant of securities, or agreement to issue or grant securities, to the employees of J Boag & Son pursuant to offers made to such employees prior to the date of this announcement; and
- shares that come to be in the bid class due to the exercise of options, outstanding or agreed to be issued at the date of this announcement, over J Boag & Son shares.
Mr. Philip Adkins, J Boag & Son's Chairman and Chief Executive Officer, through Cadenza Securities Trading International Limited, and the largest shareholder in J Boag & Son has concurrently sold to San Miguel 5,550,000 shares in J Boag & Son representing 10.3% of the issued shares of the Company. Mr. Adkins has also indicated his present intention to sell his remaining shares in J Boag & Son into San Miguel's offer. In addition, Rothschilds Asset Management Ltd has also sold 2,500,000 shares in J Boag & Son, representing 4.6% of the issued shares in the Company to San Miguel. On this basis, San Miguel has voting power of approximately 14.9% in J Boag & Son.
J Boag & Son holds a portfolio of well-known Australian and International premium beer brands, among them Strongarm Bitter and flagship brand, James Boag Premium Lager. The exclusive distributor of Carlsberg and Samuel Adams in Australia, J Boag & Son also has non-brewing interests in the Australian hotel and restaurant businesses. The company's sales revenues in 1999 totaled A$42.8 million (US$25.8 million).
Australia's premium beer category represents 4% of the overall market and is the fastest growing segment in the beer industry, projected to grow at a compounded rate of over 15% in the medium term.
San Miguel's acquisition of J Boag & Son represents a strategic investment in the Australian premium brewing market. In addition to J Boag & Son's strong growth prospects in the domestic Australian market, San Miguel believes that the company's premium brands have excellent potential to be sold through San Miguel's Asian distribution system. The acquisition also reaffirms San Miguel's commitment to investment in Australia across its core businesses. The acquisition will be earnings accretive to San Miguel.
San Miguel does not have any brewing operations in Australia and, based on its current knowledge, San Miguel's intention is to retain the management and employees of J Boag & Son, if its off market takeover bid is successful.
San Miguel's offer will be sent to J Boag & Son's shareholders as soon as possible under the Corporations Law. A Bidder's Statement is expected to be lodged with ASIC in early May 2000.
San Miguel has appointed J. P. Morgan to act as its financial adviser and Freehill Hollingdale & Page as its legal adviser.
Founded in 1890, San Miguel is the largest food and beverage company listed in S.E. Asia and is active within the brewing and beverages, food and food-related, and packaging areas. San Miguel's ordinary shares trade on the Philippine Stock Exchange and trade in ADR form in the US (each equal to ten SMC Class B common shares). Prices for the ADRs may be accessed on the NASD OTC Bulletin Board under the symbol SMGBY. Quotes for San Miguel ordinary shares may be accessed on Bloomberg under the symbol SMC/B PM and on the Reuter Equities 2000 Service under the symbol SMC.
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