San Miguel to repay 34 Boags shareholders

Philippines-based food and beverage giant San Miguel Corp is to pay US$ 260,000 in damages to 34 former J. Boags and Son shareholders after an investigation by the Australian Securities and Investment…

Philippines-based food and beverage giant San Miguel Corp is to pay US$ 260,000 in damages to 34 former J. Boags and Son shareholders after an investigation by the Australian Securities and Investments Commission (ASIC). ASIC said some shareholders may have known San Miguel was considering making its US$ 1.65 offer for Boags before it was formally announced to the market on 17 April 2000. ASIC said the agreement ensured that those who sold their shares on 17 April, in what the Commission believed was an uninformed market, would be paid any shortfall between the sale price they received and the takeover price that was paid by San Miguel. The funds are to be distributed by ASIC to 34 Boags shareholders. The investigation related to San Miguel“s US$ 92 million takeover of the Tasmanian brewer last year. ASIC said San Miguel purchased 8.05 million Boags shares at US$ 1.65 in a special crossing on 17 April 2000. Boags shares had traded between 89 cents and US$ 1.00 throughout the day, losing ground in a sharply weaker market. But after the share crossing, the price of Boags rose to US$ 1.115 and a further 200,865 shares changed hands. Later that evening, Boags announced San Miguel intended to make an off-market takeover bid, offering US$ 1.65 in cash for each ordinary share. San Miguel and Boags both denied any breach of their continuous disclosure requirements. ASIC said there was no suggestion that any shareholder who had access to the information had profited by trading during the relevant period. “Today“s outcome will remind other companies that failing to promptly comply with their continuous disclosure obligations may mean that they have to compensate investors who trade in an uninformed market,” said ASIC“s Tasmanian Regional Commissioner Simon Dwyer.