UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
(Amendment
No. 4)
SCHEDULE
13E-3
Rule
13e-3
Transaction Statement
under
Section 13(e) of the Securities Exchange Act of 1934
QUILMES
INDUSTRIAL (QUINSA) SOCIÉTÉ ANONYME
(Name
of
Subject Company (issuer))
QUILMES
INDUSTRIAL S.A.
(Translation
of Issuer’s Name into English)
QUILMES
INDUSTRIAL (QUINSA) SOCIÉTÉ ANONYME
(Name
of
Filings Persons (identifying status as offeror, issuer or other
person))
Registered
Office: 84, Grand Rue L-1660 Luxembourg
Registered
Number: RCS Luxembourg B 32501
Class
B
Common Shares, without par value
American
Depositary Shares, each of which represents two (2) Class B Shares, without
par
value,
evidenced
by American Depositary Receipts
(Title
of
Class of Securities)
74838Y20
(CUSIP
Number)
Miguel
Gomez Eiriz
Chief
Financial Officer
84,
Grand Rue L-1660 Luxembourg,
Grand-Duchy
of Luxembourg.
(352) 47
38 85
(Name,
Address and Telephone Number of Person
Authorized
to Receive Notices and Communications)
________________
WITH
COPIES TO:
Diane
G. Kerr
Davis
Polk & Wardwell
450
Lexington Avenue
New
York, New York 10017
(212) 450
4000
(Name,
address and telephone number of person authorized to receive notices and
communications on behalf of the bidder)
This
statement is filed in connection with (check the appropriate box):
|
a)
|
[
] The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c)
under
the Securities Exchange Act of
1934.
|
|
b)
|
[
] The filing of a registration statement under the Securities
Act of 1933.
|
Check
the
following box if the solicitation materials or information statement referred
to
in checking box (a) are preliminary
copies: [ ]
Check
the
following box if the filing is a final amendment reporting the results of the
transaction: [ ]
Calculation
of Filing Fee
|
Transaction
Value
|
Amount
of Filing Fee
|
|
$385,596,349.00
|
n/a
|
*
Set
forth the amount on which the filing fee is calculated and state how it was
determined.
[
ü
]Check
the box if any
part of the fee is offset as provided by the Exchange Act Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number,
of the Form or Schedule and the date of its filing.
|
Amount
Previously Paid:
|
$11,837.81
|
|
Form
or Registration Number:
|
Schedule
TO-T
|
|
Filing
Party:
|
Companhia
de Bebidas das Américas - AmBev
|
|
Date
Filed:
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12-28-07
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This
Amendment No. 4 to the
Rule 13E-3 Transaction Statement filed by Quilmes Industrial (Quinsa),
Société Anonyme (“Quinsa” or the “Company”) on January 14, 2008 (such Statement
as amended by Amendment No. 1 thereto filed by Companhia de Bebidas das Américas
– AmBev (“AmBev” or the “Offeror”) on January 16, 2008, by Amendment No. 2
thereto filed by Quinsa on January 28, 2008, by Amendment No. 3 thereto filed
by
Quinsa on January 29, 2008 and by this Amendment No. 4, the “Transaction
Statement”) relates to the offer by AmBev to purchase any and all outstanding
Class A Shares and Class B Shares (including Class B Shares held as American
Depositary Shares (“ADSs”)) of the Company that are not owned by AmBev or its
affiliates upon the terms and subject to the conditions set forth in the
Offer
to Purchase, including all schedules thereto, and in the related Letters
of
Transmittal filed by the Offeror on December 28, 2007 (which, as amended
or
supplemented from time to time, together constitute the “Offer to
Purchase”). The information set forth in the Offer to Purchase and in
the Schedule TO-C filed by the Offeror on December 26, 2007, is, where specified
herein, expressly incorporated by reference in response to items of the
Transaction Statement, and is supplemented by the information specifically
provided herein. Capitalized terms defined in the Offer to Purchase
and used herein without definition shall have the meanings specified in the
Offer to Purchase.
ITEM 8. FAIRNESS
OF
THE TRANSACTION.
The
section of this Item 8
t
hat
begins with the heading “Background of the Offer” is hereby amended and restated
in its entirety to read as follows:
“
Background
of the Offer
During
the
week prior to AmBev’s announcement that it intended to make the Offer,
representatives of AmBev informed certain members of Quinsa’s management that
AmBev was considering entering into discussions with certain of Quinsa’s
shareholders with respect to the possibility of AmBev making a tender offer
for
the Quinsa shares not owned by AmBev and of such shareholders agreeing to
tender
their shares in the offer. AmBev did not disclose to Quinsa any
proposed terms of the possible offer and did not request any information
from
Quinsa or solicit any recommendation or advice from Quinsa or the
Board.
On
December 21, 2007, AmBev announced that its board of directors had approved
a
plan to make the Offer and that Arnhold and S. Bleichroeder Advisers, Punch
Card
Capital and Duma Capital Partners (collectively, the “Shareholder Group”) had
agreed to sell their shares, totaling a 3.22% economic interest in Quinsa
.
On
December 28, 2007, AmBev commenced the Offer.
On
January
29, 2008, AmBev issued a press release announcing that as of the close of
business on January 28, 2008, 6,277,001 Class B shares (including Class B
shares
held as ADSs) of Quinsa, representing 71.3% of the outstanding Class B shares
of
Quinsa not owned by AmBev or its subsidiaries, had been tendered in and not
withdrawn from the voluntary offer made by AmBev, which exceeds the threshold
of
5,968,722 Class B shares (including Class B shares held as ADSs) at which
AmBev
had agreed to increase the Offer price. Therefore, the Offer price
has been increased to U.S.$4.125 per Class A share, U.S. $41.25 per Class
B
share and U.S.$82.50 per ADS pursuant to the terms and conditions of the
Offer. Furthermore, AmBev announced that, in order to comply with
applicable law, the Offer period has been extended until 5:00 P.M. NY time
(11:00 P.M. Luxembourg time) on February 11, 2008.
AmBev
has
indicated in the Offer to Purchase that its purpose and plan is to acquire
all
of the Quinsa shares and ADSs that it does not already own and thereafter
for
Quinsa to delist its Class A shares and its Class B shares from the LSE,
to
delist its ADSs from the NYSE, to terminate its ADS facility and, as and
when
permitted by applicable law and regulation, to terminate the registration
of the
Class B shares under the Exchange Act.
Except
as
described in the Offer to Purchase and in this Statement, Quinsa has no plans,
proposals or negotiations which relate to or would result in (i) any significant
change in the working conditions of the employees of the Company or its
subsidiaries, (ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company, (iii) any purchase,
sale or
transfer of a material amount of assets of the Company, (iv) any material
change
in the Company’s present dividend policy, or (v) any other material change in
the Company’s business.
Review
of the Offer by the Board
The
Board
met on December 28, 2007 and again on January 14, 2008 to consider the
Offer.
The
December 28 Meeting
Promptly
after AmBev’s press release dated December 21, 2007, the Board began a process
to put itself in a position to determine whether the Offer is fair to
shareholders of the Company other than AmBev and its affiliates and to decide
whether to recommend that these shareholders tender their shares in the
Offer.
On
Friday,
December 28, 2007, the Board met to review the announcements made by AmBev
with
respect to the Offer as reflected in AmBev’s press releases dated December 21,
2007 and December 28, 2007 and to select and engage a financial adviser and
legal counsel to advise the Board in connection with its consideration of the
Offer. All of the directors were present. The Board
reviewed a proposal from Citigroup Global Markets Inc. (“Citigroup”) that, among
other matters, disclosed Citigroup’s engagement by the Board in connection with
the tender offer made by AmBev for the Company’s shares in 2007 and the
engagements of Citigroup by AmBev and its affiliates. The Board
reviewed the fact that, in 2007, it had concluded that Citigroup’s prior
relationships with AmBev as of that time did not impair Citigroup’s judgment or
ability to render a fairness opinion to the Board. In particular, the
Board reviewed that it had previously considered the past relationship between
Citigroup and AmBev, including the fact that Citigroup had prepared a report
in
2006 on behalf of AmBev, and that it also had considered the nature of that
relationship, the identity of the persons involved, the scope of the overall
relationship between Citigroup and AmBev as compared to those existing between
AmBev and other investment banking firms having the expertise to provide the
service being requested of Citigroup, and the terms upon which Citigroup was
prepared to render its services. At the December 28 meeting, the
Board reviewed the nature and scope of each engagement or relationship entered
into between Citigroup and AmBev since the time of the Board’s prior analysis
including the fact that Citigroup had acted as a joint bookrunner in a $161
million international bond issuance by an AmBev subsidiary in July
2007. The board also discussed Citigroup’s extensive prior knowledge
of the Company, its expertise in the Company’s industry and its experience in
advising the Board. After taking all of these factors into
consideration, the Board determined to retain Citigroup. The Board
also decided to retain Davis Polk & Wardwell, as U.S. counsel, and Elvinger,
Hoss & Prussen, as Luxembourg counsel, in connection with the
Offer.
The
January 14 Meeting
On
January
14, 2008, the Board met to review the Offer. All of the directors
were present. The Board reviewed and discussed the terms of the
Offer.
Following
this discussion, Citigroup, the financial institution selected by the Board
to
act as its financial adviser in connection with the Offer, made a presentation
to the Board reflecting the valuation analysis that Citigroup had done for
purposes of evaluating the Offer and delivering to the Board an opinion with
respect to the fairness, from a financial point of view, of the consideration
proposed to be paid in the Offer. After completing its presentation, Citigroup
delivered to the Board its written opinion, dated January 14, 2008, to the
effect that, as of the date of the opinion and based on and subject to various
assumptions and limitations described in the opinion, (i) the consideration
offered to holders of Class A shares in the Offer is fair, from a financial
point of view, to the holders of Class A shares and (ii) the consideration
offered to holders of Class B shares (including those held in the form of ADSs)
in the Offer is fair, from a financial point of view, to the holders of Class
B
shares, in each case other than AmBev and its affiliates. A summary
of Citigroup’s written opinion is set forth below. At the conclusion
of this
meeting,
the Board determined that the Offer is fair to shareholders of the Company
other
than AmBev and its affiliates and decided to recommend that these shareholders
tender all of their shares in the Offer. See “Item 8. Fairness of the
Transaction- Determination of Fairness by the Board” and “Item 8. Fairness of
the Transaction – Recommendation of the Board of Directors”.
Determination
of Fairness by the Board
In
unanimously determining that the Offer is fair to the Company’s unaffiliated
shareholders, the Board considered both the substantive fairness and the
procedural fairness of the Offer to these shareholders. In connection
with its consideration of both substantive fairness and procedural fairness,
the
Board considered various factors. The Board did not assign any
specific weights to the factors discussed below. Rather, its determinations
were
made after consideration of all of these factors as a whole.
Substantive
Fairness
In
unanimously determining that the Offer is substantively fair to the Company’s
unaffiliated shareholders the Board considered a number of factors, including
the following:
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·
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The
Board’s financial adviser, Citigroup, concluded that, and delivered to
the
Board its opinion, dated January 14, 2008, to the effect that, as
of the
date of the opinion, the consideration offered to holders of Class
A
shares and Class B shares (including those represented by ADSs) in
the
Offer is fair to such holders from a financial point of
view. The full text of Citigroup’s opinion, which sets forth
the assumptions made, general procedures followed, matters considered
and
limitations on the review undertaken, is attached hereto as Exhibit
(c)(i)
and is incorporated herein by reference. Citigroup makes no
recommendation to any shareholder regarding how such shareholder
should
vote or act on any matters relating to the
Offer.
Holders of Class A shares and Class B shares are
urged to read the Citigroup opinion carefully and in its
entirety
;
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|
·
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Citigroup’s
financial presentation and analysis dated January 14, 2008 which
was
presented to the Board and adopted by the Board at its January 14
th
meeting and
which is more fully described below under the heading “Opinion of
Citigroup Global Markets Inc.”;
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·
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The
fact that the Offer price falls within the range of fairness under
each
valuation methodology employed by
Citigroup
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·
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The
fact that, as of December 21, 2007, the last full trading day before
AmBev’s announcement of the Offer, to Quinsa’s knowledge, the Offer price
represented the highest price per share ever paid for the Company’s stock
in an open market transaction on either the NYSE or the LSE or in
a
privately negotiated transaction since the Company has been listed
on the
LSE and the NYSE;
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·
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The
fact that, the Offer price represents a premium of 21.25% over the
last
reported ADS price, 21.16% over the last reported Class B share price
and
21.27% over the last reported Class A share price on December 21,
2007,
the last full trading day before AmBev’s announcement of the
Offer;
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·
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The
fact that, as of December 21, 2007, the last full trading day before
AmBev’s announcement of the Offer, the Offer price represented a 4.05%
premium over the then highest reported price for the ADSs on the
NYSE
($78.09 on July 9, 2007);
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·
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The
fact that, as of December 21, 2007, the last full trading day before
AmBev’s announcement of the Offer, the Offer price represented a 9.78%
premium over the then highest reported trading price for the Company’s
Class B shares on the LSE ($37.00 on April 3,
2007);
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|
·
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The
fact that, as of December 21, 2007, the last full trading day before
AmBev’s announcement of the Offer, the Offer price represented a 4.10%
premium over the then highest trading price ever recorded for the
Company’s Class A shares on the LSE ($3.90 on March 29,
2007);
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|
·
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The
fact that, there is limited market liquidity for the Company’s shares,
that this liquidity will be reduced significantly whether or not
shares
are tendered pursuant to the Offer, and that reduced liquidity might
adversely affect the value of shares remaining in the hands of
unaffiliated shareholders;
|
|
·
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AmBev’s
stated plans to have Quinsa delist the Class A shares and the Class
B
shares from the LSE, to delist the ADSs from the NYSE, to terminate
the
ADS facility and, as and when permitted by applicable law and regulation,
to terminate the registration of the Class B shares under the Exchange
Act, if completed, might impair the value of shares remaining in
the hands
of unaffiliated shareholders.;
|
|
·
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The
Offer provides the Company’s shareholders who are considering selling
their Class A shares or Class B shares with the opportunity to sell
their
shares at the Offer price without incurring the transaction costs
typically associated with market sales;
and
|
|
·
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The
consideration to be paid to the Company’s shareholders consists entirely
of cash.
|
The
Board
evaluated the Citigroup financial presentation and analysis and concluded that
it was based on reasonable assumptions and that the valuation methodologies
set
out therein are the most appropriate valuation methodologies for the Shares
and
the Offer. The Board concluded that this presentation and analysis,
as well as Citigroup’s opinion supported a conclusion that the Offer is
substantively fair to unaffiliated Company shareholders because these factors
support the conclusion that the consideration being offered to the Company’s
shareholders is fair from a financial point of view.
I
n
assessing the substantive
fairness of the Offer the Board compared the Offer price to the various
historical market trading prices of the Company’s stock described
above. The Board selected these historical prices because, in each
case, the relevant trading day preceded the date of AmBev’s announcement of the
Offer and thus the applicable market trading price should not have been affected
by the existence of the Offer or the Offer price and because the historical
prices were either all time high prices for the Company’s shares or were recent
market prices for these shares. The Board reasoned that the market
trading price of the Company’s stock is an appropriate factor to consider when
assessing the fair value of the Company’s stock and accordingly that the fact
that the Offer price exceeds the respective market prices listed above supports
a conclusion that the Offer is substantively fair to the Company’s unaffiliated
shareholders. In evaluating substantive fairness, the Board also
considered the form of consideration being offered by AmBev and noted that
the
Offer price will be paid entirely in cash.
The
Board
concluded that cash consideration supports a conclusion of substantive fairness
because if offers unaffiliated shareholders certainty of value.
As
part of
determining that the Offer is substantively fair to the Company’s unaffiliated
shareholders, the Board evaluated the existing and anticipated market liquidity
for holders of shares. If AmBev purchases shares or ADSs pursuant to
the Offer, the liquidity of the Class A shares not tendered in the Offer may
be
substantially reduced and the liquidity of the Class B shares and the ADSs
not
tendered in the Offer will be substantially reduced. The Shareholder
Group is obligated under the terms of its agreements with AmBev to tender all
of
the shares it owns (as of January 4, 2008, approximately 43% of the Class B
shares not owned by AmBev and its affiliates) in the
Offer. Consequently, even if no other Class B shares were tendered,
there would be an over 40% reduction in the market liquidity of the Class B
shares. Moreover, unless the Shareholder Group breaches its
obligations under its agreements with AmBev or certain other customary
conditions fail to be satisfied, AmBev is obligated to buy the Shareholder
Group’s shares even if the Offer is terminated and no shares are purchased
thereunder. As a result, the Board concluded that, subject to these
very limited exceptions, the market liquidity of the Class B shares will be
reduced by more than 40% regardless of the position taken by the Board with
respect to the Offer and regardless of the actions taken by unaffiliated
shareholders in response to the Offer.
The
Board
also noted that the agreements between AmBev and the Shareholder Group prohibit
members of the Shareholders Group from purchasing Quinsa shares for a period
of
five years from the date of the sale of their shares to AmBev. Based
on filings on Schedule 13D made by the Shareholder Group, it appears that
members of the Shareholder Group have been active buyers of the Company’s
shares. Upon the closing of the transactions contemplated by the
agreements between the Shareholder Group and AmBev, these shareholders may
no
longer act as buyers for shares held by shareholders who elect not to tender
their shares in the Offer. Consequently, these shareholders will no
longer be available as sources of market liquidity for other shareholders who
may wish to sell their shares.
After
determining that the Offer and the agreements between AmBev and the Shareholder
Group will significantly reduce the market liquidity of the Class B shares,
the
Board also considered AmBev’s stated plans with respect to delisting the Class A
shares and the Class B shares from the LSE, delisting the ADSs from the NYSE,
terminating the ADS facility and, as and when permitted by applicable law and
regulation, terminating the registration of the Class B shares under the
Exchange Act. The Board concluded that these plans, if carried out,
would be likely to further impair market liquidity and that there might not
exist any organized trading market in which shareholders could dispose of their
shares. The Board also noted that, if these plans were fully
implemented, the Company’s obligation to publicly disclose financial and other
information regarding its business, its obligation to have independent directors
on the Board, its obligation to maintain an audit committee and its obligation
to comply with the Sarbanes-Oxley Act, certain requirements of Luxembourg law
and other rules and regulations also would terminate.
The
Board
concluded that a substantial reduction in market liquidity, and/or the other
effects of the implementation of AmBev’s plans described above, might reasonably
be expected to materially decrease the value of the shares held by the Company’s
unaffiliated shareholders and that these shareholders might find it difficult
in
the future to realize liquidity on their investment in the
Company. Accordingly, the Board concluded that participating in the
Offer might be one of the last and best opportunities for unaffiliated
shareholders to realize liquidity at a price that the Board considers fair
from
a financial point of view. The Board also noted, that from a value
perspective,
the Offer has the advantage of allowing shareholders to sell their shares
without paying customary transaction costs.
The
foregoing discussion of the factors considered by the Board in connection with
its determination that the Offer is substantively fair to the Company’s
unaffiliated shareholders is not intended to be exhaustive; however, it includes
all of the material factors considered by the Board.
In
view of
these factors and the other information available to it, the Board concluded
that it did not need to take any additional steps or consider any additional
factors in order to reach its conclusion as to the substantive fairness of
the
Offer and the Board did not take any other steps or consider any other material
factors.
Procedural
Fairness
In
unanimously determining that the Offer is procedurally fair to the Company’s
unaffiliated shareholders the Board considered a number of factors, including
the following:
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·
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The
Offer price is the result of an arms length negotiation between AmBev
and
three of the Company’s largest shareholders, none of whom are affiliated
with AmBev;
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·
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The
Board retained Citigroup, a financial adviser that does not have
material
relationships with AmBev or its affiliates to evaluate the Offer
and to
advise it as to the fairness, from a financial point of view, of
the
consideration being offered to unaffiliated
shareholders;
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·
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The
members of the Board who are not employees of AmBev and its affiliates
unanimously agreed with the actions taken by the Board as a
whole;
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·
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The
Board retained counsel not affiliated with AmBev to represent it
in
connection with its consideration of the
Offer;
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·
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AmBev
has not proposed any “squeeze-out” transaction following the Offer;
and
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·
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Shareholders
who wish to take advantage of the Offer but still retain an investment
in
Quinsa may do so by investing the proceeds of the Offer in AmBev,
or in
its parent company, InBev.
|
The
Board
reviewed the facts, as to which it had knowledge, relating to the negotiation
of
the Offer price. The Board noted that the Shareholder Group is
comprised of three institutional investors, none of whom are affiliated with
AmBev and that, according to the Schedule 13D filed by the Shareholder Group,
all of these investors are advised by a common professional
adviser. The Board also noted that the Offer price resulted from a
direct negotiation between these investors and AmBev and that the Shareholder
Group had the incentive to negotiate the highest possible Offer price and the
best possible Offer terms from AmBev. The Board therefore concluded
that it had no reason to believe that this negotiation was other than an arms
length negotiation between unrelated parties, that the Shareholder Group, in
essence, provided the Company’s unaffiliated shareholders with a disinterested
representative in the negotiation of the Offer price and other terms and that
these factors support a determination that the Offer is procedurally fair to
the
Company’s shareholders other than AmBev and its affiliates.
In
the
Board’s view, procedural fairness requires that any professional advice rendered
to the Board and on which the Board relies in reaching its conclusions with
respect to the Offer be
competent,
professional and, to the maximum extent practicable, free of any conflict of
interest with AmBev and its affiliates. Accordingly, the Board
concluded that retaining Citigroup, a highly competent and experienced financial
adviser that does not have material relationships with AmBev or its affiliates,
to evaluate the Offer and to advise it as to the fairness of the Offer
consideration from a financial point of view, supported a determination of
procedural fairness. Similarly, the Board determined that the
retention of highly regarded legal advisers having no conflict of interest
with
AmBev and reliance on these advisers with respect to matters such as the
responsibilities of the Board to Quinsa and its shareholders in connection
with
the Offer were a material factor contributing to its determination that the
Offer is procedurally fair to the Company’s unaffiliated
shareholders.
In
evaluating the procedural fairness of the Offer, the Board discussed the terms
of the Offer in order to assess the extent to which the Company’s shareholders
might perceive the Offer as coercive. The Board noted that the Offer
is a voluntary Offer. Each shareholder may make its own decision as
to whether to participate in the Offer and AmBev has not proposed any
“squeeze-out” transaction following the Offer. The Board acknowledged
that some shareholders might be concerned about not tendering their shares
in
the Offer due to concerns about future market liquidity for the Company’s
shares. The Board noted, however, that, as a result of the agreements
between AmBev and the Shareholder Group, the Company’s shareholders would be
likely to face significantly reduced market liquidity even if no Offer were
to
take place. Moreover, the Board noted that, unlike the circumstances
that exist in connection with many transactions, the Company shareholders who
wish to take advantage of the Offer in order to avoid the risks associated
with
a possible decrease in market liquidity for the Company’s shares but also to
retain an investment in Quinsa’s business may do so by tendering their shares
and then reinvesting the proceeds of the Offer in either AmBev or InBev, as
both
of Quinsa’s parent companies are publicly traded. In light of these
facts, the Board concluded that the Offer is not coercive and that this
conclusion supports a determination of procedural fairness.
In
evaluating the procedural fairness of the Offer, the Board also considered
that,
as described below under the heading “Certain Other Information Relevant to
Fairness and the Board’s Recommendation”, there was no special committee of
directors formed in connection with the Offer, neither Quinsa nor the Board
nor
any representatives of either entered into any negotiations with AmBev on behalf
of the unaffiliated shareholders, a majority of the Board members are affiliates
of AmBev and the Board appoints all of Quinsa’s senior
management. The Board balanced these factors against the factors
favoring a determination of procedural fairness described above and concluded
that the Offer is procedurally fair to the Company’s shareholders other than
AmBev and its affiliates.
The
foregoing discussion of the factors considered by the Board in connection with
its determination that the Offer is procedurally fair to the Company’s
unaffiliated shareholders is not intended to be exhaustive; however, it includes
all of the material factors considered by the Board.
In
view of
these factors and the other information available to it, the Board concluded
that it did not need to take any additional steps or consider any other material
factors in order to reach its conclusion as to the procedural fairness of the
Offer and the Board did not take any other steps or consider any other material
factors.
Certain
Other Information Relevant to Fairness and the Board’s
Recommendation
When
assessing the Board’s conclusions as to the fairness of the Offer and the
recommendation of the Board set forth below in this Statement, shareholders
should be aware that
the
Board
is comprised of seven persons all of whom have been appointed by AmBev and
that
the AmBev controlled Board appoints all of the members of the Company’s senior
management. Of these directors, (i) three are related to AmBev
(either as employees, officers, directors or subsidiaries of AmBev), (ii) three
are independent (as such term is defined under the Sarbanes Oxley Act of 2002)
and (iii) one director is a former officer of AmBev. All of these
directors participated in the analysis and review of the Offer and voted in
favor of determining that the Offer is fair to the Company’s shareholders other
than AmBev and its affiliates and in recommending that these shareholders tender
their shares in the Offer. The Board decided not to establish a special
committee for the purposes of evaluating the fairness of the Offer or engaging
in any negotiations with AmBev. No such action is required by
Luxembourg law.
The
directors of the Company who are employees or nominees of AmBev, may have
divided loyalties. As directors their obligation is to act in the best interest
of the Company and its shareholders. However, as AmBev employees or nominees,
these directors may have loyalties to AmBev as well. Shareholders should take
this potential for divided loyalties into account in assessing the Board’s
determination of fairness and recommendation with respect to the
Offer.
When
evaluating the Offer and the recommendation of the Board with respect to it,
shareholders also should be aware that, while the Company retained counsel
different from counsel representing AmBev to provide separate legal advice
to
the Company and its directors in connection with the Offer, counsel to Quinsa
did not report to the independent directors separately or to persons
unaffiliated with AmBev and counsel to Quinsa did not engage, on behalf of
the
Company’s minority shareholders, in any independent negotiations with AmBev or
AmBev’s counsel regarding the transaction or the Offer
price. Furthermore, counsel to Quinsa did not participate in
negotiations between AmBev and the Shareholder Group. Apart from the
Board retaining Citigroup as its financial adviser as described in this
Schedule, none of Quinsa, the Board (including the independent directors of
the
Company) or any of their respective representatives hired any separate adviser
to prepare a report concerning the fairness of the Offer.
The
Offer
price was determined by AmBev and the Shareholder Group, without consultation
with the Board or Quinsa. None of Quinsa, the Board or any or their
respective representatives made any effort to negotiate any increase in the
Offer price. Quinsa did not consider any alternatives to the
Offer. The Board is not aware of any firm offers from an unaffiliated
third party during the past two years for (i) the merger or consolidation of
the
Company with or into another company, (ii) the sale or transfer of all or the
substantial part of the assets of the Company or (iii) a purchase of shares
that
would enable the holder to exercise control of the Company and therefore did
not
consider any such offers in assessing the fairness of the Offer.
With
respect to the Board’s determination of the fairness of the Offer, the Board did
not consider the Company’s liquidation value. Liquidation value
assumes the Company would cease operations, with its value resulting from the
sum of the individual assets to be sold. Intangible assets unable to
be sold, such as goodwill, would not be captured in the determination of
liquidation value. The Board does not believe this to be relevant
precisely because more substantial value results from the Company continuing
to
operate and any liquidation would destroy that value. The Board does
not have any present intention to liquidate the Company in the foreseeable
future and AmBev has stated in the Offer to Purchase that it does not have
any
such intention. Therefore, the Board did not seek any appraisal of
liquidation value for purposes of valuing the Class A shares or the Class B
shares and the Board believes that the liquidation value of the Company is
irrelevant to a determination as to whether the Offer is fair to the
shareholders of the Company other than AmBev and its affiliates. The
Board also did not consider net book value, which is an accounting concept,
as a
factor because the Board believed
that
net
book value is not a material indicator of the value of the Company as a
continuous operation but rather is indicative of historical
costs. The Company’s net book value as of December 31, 2006,
calculated by dividing shareholders’ equity by the number of shares outstanding,
was $0.64 per Class A share and $6.40 per Class B share. This value
is only 15.8% of the Offer price for the Class A shares and the Class B
shares. The Board did not consider going concern value because it
does not believe that going concern value is a viable method of valuation for
a
transaction such as the Offer. Going concern valuation is a specific
method of determining the value of a business by using the revenues of previous
years to project future revenues, and it assumes that such revenues will remain
unchanged. Given the volatility in the economies and market condition
of the countries in which Quinsa’s subsidiaries conduct their business, which
have impacted Quinsa’s past performance significantly, Quinsa believes that
assuming that such revenues will remain unchanged in the future would not
produce an accurate and realistic value for the
Company. Consequently, the Board did not consider going concern
valuation as a viable method of valuation for the Offer
Recommendation
of the Board of Directors
After
careful consideration and discussion, at the January 14, 2008 meeting, the
Board
unanimously:
(a)
determined that the Offer is fair to the Company’s shareholders other than AmBev
and its affiliates; and
(b)
decided to recommend that shareholders tender their shares in the
Offer.
Reasons
for the Board’s Recommendation
The
Board
decided to recommend that shareholders tender their shares in the Offer because
the Board believes that the consideration offered to holders of Class A shares
and Class B shares (including those represented by ADSs) in the Offer is fair
to
such holders from a financial point of view and that the Offer otherwise is
substantively and procedurally fair to these shareholders. For an
explanation of the factors upon which the Board based its conclusions with
respect to the fairness of the Offer consideration and the Offer and the reasons
for the Board’s determination and recommendation, see “Item 8 – Fairness of the
Offer – Determination of Fairness by the Board”.”
In
addition, the disclosure following the table that appears under the heading
“Comparable Companies Analysis” is supplemented by the following
footnote:
Source:
IBES estimates, Bloomberg,
FactSet and companies’ filings.
(1)
Based
on Quinsa’s management estimates. Figures based on proportional consolidation of
QIB’s stake in each operating subsidiary and on Quinsa’s 92.9% stake in
QIB.
Item
16 of the Transaction Statement is hereby supplemented by adding the following
exhibit:
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(a)(5)(iii)
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Press
Release of the Company dated January 31, 2008 (incorporated by reference
to Amendment No. 3 to the Schedule 14D-9 filed by the Company on
January
31, 2008).
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After
due
inquiry and to the best of my knowledge, I certify that the information set
forth in this statement is true, complete and correct.
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QUILMES
INDUSTRIAL (QUINSA), SOCIÉTÉ ANONYME
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Date:
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By:
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/s/ Miguel
Gomez Eiriz
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Name:
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Title:
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-14-
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