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Friday, 1 December, 2000, 12:40 GMT
Interbrew shares rise on debut
Crates of Stella Artois stacked in a supermarket
Interbrew's flotation went ahead regardless of the UK competion investigation
Shares in Interbrew - owner of the Stella Artois brand - made immediate gains on Friday after the Belgian brewing giant debuted on the stock market.

In early trading on the pan-European Euronext exchange, Interbrew shares rose 1.39 euros to 34.39 euros, valuing the firm at 14.43bn euros ($12.63bn).

"It is a very good debut, great volume and nicely above the issue price," Frank Dumont, a trader at DeMaertelaere investment house said.

However, analysts warned that more lasting progress might be hindered by investors' concerns over an ongoing regulatory review of the firm's acquisition of part of the UK's Bass.

But they said they expected the stock to hold at about 34-35 euros for the immediate future.

Acquisition financing

Interbrew had floated 88.2 million shares, or about 21% of its capital, in the offering, which it said had been more than four times oversubscribed.

This had raised about 2.9m euros for the world's second largest brewer, which is still mostly family-owned.

The shares had been offered at 33 euros each, at the lower end of a 30 to 38 euros price range.

The funds released by the share sale are to be used to help finance acquisitions made in the UK earlier this year as well as future growth.

South African speculation

When the flotation was announced, chairman Paul De Keersmaeker said international expansion was vital for Interbrew and it intended to take advantage of every opportunity that arose.

Investors on Friday alighted on South African Breweries - the world's fourth biggest brewer - as a possible tie-up target and bought its shares heavily.

Senior executives at SAB had earlier said they were looking for a merger or acquisition opportunity.

"People are putting two and two together and taking a punt," said one trader. "It might be a wild punt but that is what is moving the shares."

Competition review

Interbrew, which sells 180 brands in 110 countries including its flagship Stella Artois lager, earlier this year bought the UK brewing operations of Bass and Whitbread for a total of 2.7bn.

The 2.3bn Bass acquisition, which helped give Interbrew a 32% share of the UK beer market, is still the subject of a review by UK competition authorities.

This had deterred some investors initially, who said the shares would only be attractive at the low end of the 30-38 euros price range.

Interbrew had said it would go ahead with the IPO anyway because it would be more difficult to delay it and await the review's findings than to proceed.

The Competition Commission is due to announce its verdict by 6 January 2001.

New record

Interbrew's flotation was by far Belgium's largest, beating the 1.7bn euro flotation of photography and technology firm Agfa Gevaert last year.

Announcement of the IPO had come as Interbrew announced net profit up 17% to 122m euros in the first half

.

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See also:

08 Nov 00 | Business
Interbrew to go public
19 Oct 00 | Business
Whitbread in pubs shake-up
14 Jun 00 | Business
Bass sells brewing ops
25 May 00 | Business
Beer sector faces shake-up
15 May 00 | Business
Whitbread and Bass to quit brewing
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