Colombia: SABMiller buys 0.21% of Colombia Bavaria for US$9.9 million

London-based SABMiller Plc bought a 0.21% stake October 12 in a tender offer for shares of its Colombian unit Bavaria SA, but didn't succeed in its plan to buy a 2.22% stake it didn't yet own, Dow Jones Newswires released October 12.

SABMiller paid 23.84 billion Colombian pesos ($9.9 million) for 516,304 shares of Bavaria, Colombia's largest brewer, offering a cash price of COP46,176 a share. SABMiller now controls 97.99% of Bavaria.

The reason SABMiller only garnered a 0.21% stake is because "many minority shareholders aren't aware they own Bavaria shares, others have died and their heirs haven't claimed their papers," said Paul Weiss, equity director of Corredores Asociados, the brokerage that handled the public tender.

He mentioned the case of a family whose grandfather had hidden his shares within the pages of a book in his library. The old man's heirs searched unsuccessfully throughout the bookshelves to cash the shares in the tender offer.

Last month, SABMiller had said the 2.22% stake in Bavaria was worth $105 million. The company had hired French investment bank BNP Paribas SA (13110.FR) to determine the price for each Bavaria share.

Under the Colombian securities law, SABMiller was forced to carry out a mandatory public tender offer because a minority shareholder was disappointed with an offer made in December.
SABMiller may keep buying shares from minority shareholders through the stock market or through a voluntary public tender offer, said Weiss.

But SABMiller press officer Nigel Fairbrass said buying the remainder 2.01% will be difficult.
Graham Mackay, SABMiller's chief executive, said last year that the company intended to delist Bavaria's shares from the exchange as a result of its proposed acquisition.

"No decision has been taken on the delisting at this stage," said Fairbrass.

SABMiller is now entitled to delist Bavaria's shares after it already carried out the obligatory public tender offer Thursday, said the legal department of the Colombian stock exchange.

Edgar Jimenez, equity analyst at local brokerage Promotora Bursatil, believes SABMiller may keep buying Bavaria shares through the stock market until December, before delisting.
"It's pointless and expensive to keep fulfilling legal requirements for the only 2% that (SABMiller) doesn't control," said Jimenez.

In July 2005, SABMiller bought a 71.8% stake in Bavaria for $7.8 billion from Julio Mario Santo Domingo, the country's wealthiest man.

Then, in December, the London-based brewer paid $1.2 billion to buy a 25.2% stake in the company. At the time, SABMiller offered to pay COP44,398.81 a share, or $19.48.

After that, the company further increased its stake in the Colombian brewer through the purchase of shares on the stock market.

Bavaria's shares finished up 1% on October 12 at COP46,176.