GOTHA, Fla.--(BUSINESS WIRE)--February 09, 2007 Punch Card Capital today released the text of a letter to Quilmes Industrial (Quinsa), S.A. (NYSE:LQU) regarding the tender offer from AmBev (NYSE:ABV). Dear Members of the Board: As you know, Punch Card Capital has been a shareholder of Quinsa for two and a half years. It is the company's largest independent shareholder and one of the main parties affected by AmBev's tender offer. Despite this, the Board has not been receptive to invitations to privately discuss the offer with me or my advisors. That has led me to send this letter to publicly state my position on the offer. Firstly, it is unconscionable for the Board to render an opinion on the offer without forming an independent committee to evaluate the offer. An independent committee is absolutely necessary in this case, as a majority of Quinsa's directors are related to AmBev either as employees or directors. The Board's failure to appoint an independent committee of directors to evaluate and negotiate the offer is both baffling and negligent. Shareholders expect better corporate governance from a company that is a member of the InBev (Euronext:INB) group. Secondly, the Board should have selected a financial advisor other than Citigroup Global Markets. Citigroup is one of AmBev's regular financial advisors, having provided AmBev with investment banking services on at least six different occasions in the last several years. Citigroup is the firm that advised AmBev on the April 2006 Quinsa transaction and supplied the subsequent valuation report. While I am sure that Citigroup has tried to provide unbiased advice to the Board, they are hampered by their predisposition to not upset the flow of future engagements from AmBev. In order to avoid the appearance of impropriety, the Board should select another financial advisor to evaluate AmBev's offer. Lastly, the Board should ensure that minority shareholders have all of the information that AmBev has at hand to calculate a fair share price. Results for the fourth quarter and full year 2006 should be made available before the expiration of the tender offer. Also, the Board should provide shareholders with the estimated cost savings that will result from the integration with AmBev. Credit Suisse reported in a note on October 3, 2006 that Mr. Joao Castro Neves discussed several areas of synergies yet to be captured, including shared services, procurement and ZBB implementation. These synergies will have a meaningful impact on the shares' fair value, and yet they were neglected in your analysis. Because of the problems stated above, I reject the Board's recommendation to tender into the current offer. Punch Card Capital accounts for over 1.75 million Class B shares (including Class B shares held as ADS). I remain interested in discussing with the Board the determination and negotiation of a proper offer from AmBev. If a committee of your independent members would like to follow up, please feel free to contact me. Regards, Norbert Lou Punch Card Capital CONTACT: Punch Card Capital Norbert Lou, 212-319-5413
Punch Card Capital Issues Letter to Quinsa's Board
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