E-Malt.com News article: 4015

USA, Denver: Adolph Coors and Molson put their plan to create a US$6 billion brewer on firmer ground after boosting last week a special dividend for Molson shareholders. The move to raise the cash portion of the offer by 67%, raising its total value 6% to US$3.8 billion, came amid mounting opposition to the mostly stock deal — and a nibble of interest in Molson from brewing giant SABMiller, The Associated Press mentioned on January 16. Molson stock rose 3.5% on Friday to close at a 52-week high of US$30.73 on the Toronto Stock Exchange. Coors closed down US$2.14, or 2.8%, at US$74.02.

The decision seemed to have started turning the tide, as one shareholder who had opposed the deal and a second with major holdings said they would favor it. "Overall, I think this will be enough to get it done," said analyst Michael Van Aelst, who tracks Molson for CIBC World Markets.

It was the latest twist in the family-run brewers' six-month campaign for approval of a union to create the world's No. 5 beermaker. For months, Molson shareholders have argued the proposal didn't offer enough value for their stock.

Former deputy chairman Ian Molson of the founding family has argued that the plan is bad for Molson shareholders. He said Montreal-based Molson, which has a larger market capitalization, higher profitability and stronger domestic base, would shift to a U.S. headquarters with Coors executives in charge.

Adding pressure was an announcement Wednesday from London-based SABMiller that it might make a bid for Molson if the deal failed.

Late Thursday, the companies said they would increase the special dividend they had planned to offer Molson shareholders by US$532 million. With the added cash, the proposal values Molson shares at US$31.27, a 16% premium over the US$26.99 share price before the deal was announced July 22.

The companies also pushed back shareholder votes on the deal to Jan. 28 from Jan. 19 for Molson and Feb. 1 for Coors. It was enough of a change to persuade AIM Trimark Investments, one of Molson's largest investors with about 14% of class A shares, to support the deal. Portfolio manager Ian Hardacre said the firm's concern was always about fair value. "It was more an issue of price for us ... what we thought the business was worth," he said. "Without question, the new company is a far better option than Molson on a stand-alone basis."

Burgundy Assets Management also came out in favor of the deal after opposing it earlier. A spokesman did not return a call for comment.



19 January, 2005