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Interference fears for AG Barr merger

A PROMINENT shareholder of AG Barr has highlighted fears in Scotland about "significant interference" from the south following the Irn-Bru manufacturer's merger with larger English-based rival Britvic.

OPPORTUNITY: AG Barr chief executive Roger White hopes the Britvic merger will benefit shareholders and staff.
OPPORTUNITY: AG Barr chief executive Roger White hopes the Britvic merger will benefit shareholders and staff.

Alan Waddell, the highly regarded former chairman of venerable Glasgow stockbroker Speirs & Jeffrey, raised the concern as he and other investors approved the merger at a general meeting in Glasgow yesterday.

Mr Waddell, who voiced his admiration for what North Lanarkshire-based AG Barr's directors and employees had achieved over the years, said: "I think it would be fair to say there is some anxiety in the north that the all-share merger may lead to significant interference in the south."

He added: "I hope the ideas we have stuck to so successfully over the first 137 years can be inoculated into anyone in Britvic. AG Barr is an iconic (company), especially to Glaswegians.

"I hope the iconic standing of the company can somehow be kept, and integrated in the people you are merging with."

Under the terms of the deal, the legal headquarters and registered office of the enlarged Barr Britvic Soft Drinks will be at the Scottish company's base at Cumbernauld. The operational headquarters will be at Britvic's base at Hemel Hempstead in Hertfordshire.

Asked by The Herald after the meeting if he was confident AG Barr's Scottish roots could be preserved after the deal, the retired Mr Waddell replied: "I think they will push their values on Britvic but, of course, geographically, some of the things are in the south."

AG Barr chief executive Roger White, when asked whether the merger with Britvic was a good deal from a Scottish perspective, replied: "This is an opportunity for, as described by the shareholders, an iconic Scottish company to join with another iconic company to create something which will develop long-term value.

"The most important thing for us is to create long-term value for shareholders, stakeholders, employees, and to make sure we are still here operating and developing our bigger brand portfolio in another 100 years."

AG Barr chairman Ronnie Hanna said: "Essentially, AG Barr remains a Scottish company. We are still doing the AG Barr year-end annual meetings (in Scotland).

"It is AG Barr doing a reverse takeover as the mechanism for the merger and iconic things like the name – it is still being preserved."

Pressed on whether he envisaged AG Barr would retain a big Scottish operation following the merger, Mr White said: "The Barr business is such an important (one for) Scottish consumers. It is very important for us to maintain those links."

Asked whether AG Barr had talked with politicians in Scotland about the deal, Mr White replied: "We have talked to a number of our local MPs, MSPs. We have had a good constructive dialogue."

No more than 0.63% of AG Barr's share capital was voted against any resolution in connection with the Britvic merger, apart from the proposal to approve the establishment of the Barr Britvic Soft Drinks long-term incentive plan.

Investors owning 7.6% of AG Barr voted against the establishment of this new scheme, which will provide rewards to executives, although investors holding 57.7% of the company voted in favour and thus ensured the resolution was passed.

Mr White and Mr Hanna believed some institutional investors had voted against this resolution because the full details of the scheme had not yet been published.

They explained they could not publish the full details until the merger was completed.

Mr Hanna said: "I think it is one of these things. Unless you spell out the detail, they vote against it, but you can't spell out the detail. There is nothing ominous as far as we are concerned."

Mr Waddell highlighted the impressive return he had made on his shareholding in AG Barr, acquired through purchases in the 1970s and 1980s and by reinvesting dividends.

He said: "My gratitude is probably deeper than most other people in this room."

Mr Waddell credited AG Barr for its focus over the years on making high-quality products, being careful with cash, buying the best machinery regardless of cost, delivering its products effectively and efficiently, advertising in a "humourful way", and encouraging staff to hold shares.

Britvic shareholders also approved the merger deal at a meeting yesterday.

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