E-Malt.com News article: 3596

Canada, Toronto: Molson Inc. and Adolph Coors Co. considered a plan Thursday, November 4, to sweeten their proposed merger agreement for Molson shareholders, who are split on the merits of the deal, the Globe and Mail's website reported Friday, November 5. While the so-called merger of equals is widely supported by Molson's Class B voting shareholders, Class A non-voting shareholders are less enthusiastic about the proposed deal, partly because there is a possibility of a rival, hostile bid from former vice-chairman Ian Molson.

Molson's board of directors met Thursday night to consider the proposal for a revised agreement, globeandmail.com reported. The proposed sweetener is not believed to affect the exchange ratio, through which Molson's Class A shareholders would receive 0.36 shares in Coors for every Molson share. There has been speculation that one way to boost support for the merger would be to pay a special dividend from Molson's treasury before the merger takes effect.

Molson officials declined to comment on the possibility of a sweetened deal for Molson shareholders. A Coors spokeswoman said the company does not comment on rumour or speculation.

Molson shares have been trading at a premium to the value implied by the initial merger deal, which was announced in July. That suggests that investors have been expecting a better deal with Coors or a rival offer.

Coors shares closed up $1.04 US at $69.32 Thursday on the New York Stock Exchange. The initial exchange ratio implies a value of $24.95 per Molson share ( $30.12 Cdn), if investors believed the deal would go ahead as initially proposed. But Molson's class A shares closed up 20 cents Thursday at $32 on the Toronto Stock Exchange.

Molson shareholders have been critical of the proposed merger with Coors because it does not deliver a takeover premium.

Shareholders are also holding out for a possible rival bid. The Globe and Mail has reported that Ian Molson, Toronto-based Onex Corp. and SABMiller PLC are considering a rival, hostile bid for the 218-year-old brewery.


05 November, 2004