Danone Australian unit seen going to trade buyer

Private equity firms have dropped out of the bidding for Groupe Danone’s Australian and New Zealand business, which could be worth up to A$1bn (US$685m), leaving trade buyers to battle it out.

The last private equity bidder, Pacific Equity Partners, has withdrawn from the bidding process for the unit, Frucor Beverages.

The global credit crunch has seen private equity’s access to funding dry up, but the tough market conditions have not deterred potential trade buyers, which include Coca-Cola Amatil, the Australian unit of Japanese brewer Kirin and Asian soft drink bottlers Fraser & Neave, according to bankers and analysts.

The deadline for second-round offers is imminent. About five parties submitted indicative bids last month. Coca-Cola Amatil chief executive Terry Davis said that CCA had put in an indicative bid for Frucor, but had been told others had put in higher offers.

Frucor is seen as still attracting a solid price despite the market turmoil because it is a defensive asset. Other food and beverage stocks have held up during the market downturn as investors look for firms that are insulated from a slump in consumer spending.

UBS analysts value Frucor at about A$1.08bn (US$740m) including debt, based on an estimated net profit for fiscal 2008 of A$404m.

Private equity firms including CCMP Capital Asia and a consortium including KKR, Merrill Lynch Private Equity and the privately owned P&N Beverages withdrew from the bidding earlier this month.