57% extra fizz in Charlie's buyout

Marc Ellis
Marc Ellis
Tokyo-listed Asahi Group Holdings yesterday created three multimillionaires when it made an offer for the Charlie's Group, the manufacturer of juices and organic beverages.

The offer is for 44c for each Charlie's share, a 57% premium on Friday's NZX closing price of 28c.

Major shareholders and founders Stefan Lepionka, with 41 million shares, Marc Ellis, with 40.6 million shares, and Simon Neal, with 11.9 million shares, will receive $18.2 million, $17.6 million and $5.23 million respectively when the deal goes through.

The major shareholders, which also include Collins Asset Management and Charlie's director Tim Cook, hold 52.17% of the company and have said they will accept the offer.

Craigs Investment Partners broker Peter McIntyre said investors had plenty of chances to buy Charlie's shares in the past year, the stock trading as low as 7.7c in July last year.

At that low, the company had market capitalisation of $22.7 million, compared with $127 million yesterday.

For shareholders who bought shares when Charlie's listed in 2005, the offer price represented a 340% total return.

"This is a compelling offer. There is not much to argue about here. Asahi will operate the company as a standalone entity but has seen the benefit of bringing Charlie's into its Australasian brands operated by Schweppes Australia."

Recently, Charlie's had been aggressively targeting Australian supermarket chains Woolworths and Coles to get its products distributed widely in that country, he said.

Forsyth Barr broker Peter Young said the offer was a great outcome for existing Charlie's shareholders as the offer price was a huge premium on the last traded price.

"Stefan and the board of Charlie's have worked extremely hard over the last three to four years on brand recognition for Charlie's and have made great inroads into getting their product on the shelves of many stores and supermarkets in Australasia.

"But it will be a shame to see them leave the NZX register," he said.

Mr McIntyre said it was always a problem when a listed company disappeared from the NZX, although corporate activity was always good for the market.

It showed New Zealand could create successful companies other people wanted to buy.

Asked if he could see companies listing on the NZX to replace companies like Charlie's, Mr McIntyre said the NZX seemed to be placing much faith in the partial sell-down of state-owned energy companies Meridian, Genesis and Mighty River Power, along with coal producer Solid Energy.

However, many banks were not lending as much money as they used to for mid and large-sized businesses to expand and they were likely to turn to listing as a way of raising capital.

Mr Lepionka, also Charlie's chief executive, said the offer represented a great outcome for the business and its brands at this stage of the group's life cycle.

"As a proud New Zealand company, we have fought hard to take Charlie's to the world, and we continue to do this. To take Charlie's to the next level, our brands will benefit from the substantial resources that Asahi brings to the table."

Asahi admired the Charlie's team and recognised the value in keeping Charlie's as it was, to nurture the "honest" ideology and reputation for innovation, he said.

Asahi Group's wholly-owned subsidiary, Schweppes Australia's managing director, David Beguely, said the company was thrilled to be part of of the venture.

"Charlie's complements the Schweppes Australia business very well. It particularly enhances our position in the premium beverage segments as well as providing a foothold in the New Zealand market," he said.

In a separate announcement yesterday, Asahi said it had agreed to buy the mineral water and juice business of Australia's P&N Beverages for $A188 million ($NZ244 million) after its bid to buy the entire company was blocked by an Australian watchdog.

In March, the Australian Competition and Consumer Commission blocked Asahi's attempt to buy the whole of P&N, saying the takeover would remove P&N as the only strong competitor to Australia's's Coca-Cola Amatil and Asahi-owned Schweppes.


At a glance

• Asahi Beverages NZ offers 44c cash for each share in Charlie's Group

• Charlie's major shareholders, including founders, representing 52.17% of the company agree to accept offer.

• The offer is subject to Asahi obtaining acceptances for 90% of the shares in Charlie's and consent from the Overseas Investment Office.

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