SABMiller`s R2.6bn proposal to Harbin
May 25, 2004
By Jasmine Yap and Gabrielle Monaghan
Hong Kong - SABMiller, the world`s second-largest brewer, made a formal offer of HK$3.04 billion (R2.64 billion) for the shares of Harbin Brewery Group it does not already own, setting the stage for a potential bidding war with Anheuser-Busch for the Chinese beer maker.
London-based SABMiller, which owns 29.4 percent of Harbin Brewery, bid HK$4.30 a share for the remainder of China`s oldest brewer in a letter to shareholders yesterday. ABN Amro was hired as an adviser for the offer, which is valid until June 21.
The maker of Miller beer battling with Anheuser-Busch in the US for low-carbohydrate beer, might have to take on its larger rival in China if Anheuser-Busch made a bid to up its Harbin Brewery stake from 29 percent, analysts said. Shares of the Chinese brewer have traded at more than the offer price since SABMiller announced its takeover plan on May 5.
Investors `are waiting for a counter offer from Anheuser-Busch`, said Lilian Leung, an analyst at ING Groep, who advises investors to sell Harbin Brewery shares. `SABMiller`s offer price is quite close to our previous fair value for the stock. The share price is at quite a high level already.``
Harbin shares closed unchanged at HK$4.975 in Hong Kong yesterday. Shares of SABMiller rose 7p (R0.84), or 1.1 percent, to £6.735 at midday in London.
The offer price was 38 times Harbin Brewery`s earnings last year and more than four times the brewer`s net asset value, SABMiller said.
`We think it`s a good price,` SABMiller financial director Jonathan Kirby told Bloomberg Television.
Anheuser-Busch last week completed its purchase of a 29 percent stake in Harbin Brewery.
The Harbin government has expressed support for Anheuser-Busch as a shareholder. SABMiller said it would meet government officials and the northeastern province of Heilongjiang, where Harbin Brewery is located.
`It`s just a matter of good form,` said Andre Parker, the managing director of SABMiller`s African and Asian unit.
SABMiller owns 49 percent of China Resources Breweries, a Harbin Brewery rival in northeastern China. Both Harbin Brewery and China Resources sell about 1 million tons of beer each in a northeastern market that consumes 3.6 million tons a year.
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