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Hot Topic Reporting season
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Chinese eye stake in NZ's $1B Independent Liquor

Owner of Synlait Milk wants to expand further in NZ.

Fri, 17 Jun 2011

Shanghai-based food and dairy company the Bright Foods Group Co is reported to be among the companies seeking to buy a stake in New Zealand's Independent Liquor group.

"(Private equity firms) Unitas and Pacific Equity Partners (PEP) are looking to sell a stake in New Zealand beverages group Independent Liquor," Reuters reported today.

Bright Foods Group Co was among the potential buyers, it said.

Bright Food has already bought New Zealand's Synlait Milk -- a Canterbury factory exporting milkpowders -- and said last month that it would continue to buy overseas assets in its core businesses including wine, sugar and dairy.

The maker of Chinese candy brand "Big White Rabbit," has interests that span farming, food and beverage production and retailing, and was created from four state-owned companies in 2006.

Independent Liquor had $414.4 million in revenue last year, but recorded a loss of $22.7 million, and borrowings of $693 million.

Reuters reported that PEP and Unitas were "testing the waters" and were also open to a full exit, although it was early days for the deal. The news agency reported that the company had about $95 million in ebitda (earnings before interest, tax, depreciation and amortisation) and applying a 10-12 times multiple would give the company an enterprise value of about $1 billion. 
PEP and Unitas, bought Independent Liquor in 2006 for more than $1 billion, after its previous owner, businessman Michael Erceg flew his executive helicopter -- and a Dutch businessman who was his passenger -- into treetops southwest of Raglan. The sale was later reported to have been highly leveraged.

Reuters said the private equity firms had hired UBS AG to find strategic partners to sell their stakes in the business. PEP declined comment, while Unitas was not immediately available. A Bright Food spokesman declined comment. UBS was not available for comment. 
One source said Japanese companies with a presence in Australia could also be interested in such a stake.

Independent Liquor has the nation's biggest sales of "ready-to-drink" (RTD) mixes, which are reported to have a strong appeal to younger consumers. The company has opposed proposals to reduce the proportion of alcohol allowed in RTDs, at a time when campaigners are calling for the legal drinking age to be raised.

Unitas is a buyout group formerly known as CCMP. That group spun out of J.P. Morgan when the bank decided to hive off its private equity arm.

Pacific Equity Partners is Australia's largest buyout fund focussed on investments in Australia and New Zealand.

It was last year reported to be considering a float of its Hoyts cinema chain -- valued at up to $NZ1.3 billion -- which manages about 450 screens in 40 cinema complexes in Australia and 9 cinema complexes in New Zealand.

PEP also has a 43 percent stake in the company owning poultry producer Tegel Foods Ltd, which is being sold to Singapore-based Claris Investments Pte for a reported $600 million. PEP paid $250m for Tegel six years ago.

Fri, 17 Jun 2011
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Chinese eye stake in NZ's $1B Independent Liquor