Redhook Ale-Widmer merger going slower than expected
The two breweries had been expected to complete their deal in the first quarter.
Seattle Times business reporter
The merger of Redhook Ale Brewery in Woodinville and Widmer Brothers Brewing in Portland is taking a few months longer than planned.
When officials announced the deal in November, they thought it would close in the first quarter. Now that's expected early in the third quarter, according to filings Wednesday with the Securities and Exchange Commission.
The deal must be approved by regulators, shareholders for both companies and Anheuser-Busch, which owns roughly a third of each company and will own that much of the new corporation, Craft Brewers Alliance.
The rest of Craft Brewers would be split roughly evenly between the current shareholders of Redhook and privately held Widmer. The new company would trade under Redhook's ticker symbol, HOOK, and be headquartered in Portland.
If the deal closes, several top Redhook executives would leave the company, which has 221 employees. Redhook would no longer perform the company's finance, accounting and information-technology functions.
Redhook estimates severance benefits of about $2 million, the filing said. Last year, Redhook paid about $738,000 in costs related to the merger.
Chief Executive Paul Shipman would become chairman emeritus and receive a salary of $90,000 for consulting up to 180 days during the first year after the merger, according to an earlier filing. For the next two years, he would receive severance of $267,800 a year.
In its filing Wednesday, Redhook said it posted a fourth-quarter net loss of $859,000, or 10 cents a share, on net sales of $9.95 million. That was worse than its $7,000 net loss in the fourth quarter 2006, which came on net sales of $8.34 million.
The company lost money in three of four quarters last year, partly due to competitive pressures and higher fuel and barley prices.
For the year, Redhook had a loss of $939,000, or 11 cents a share, on net sales of $41.5 million. A year earlier, it posted a gain of $516,000, or 6 cents a share, on sales of $35.7 million. That was its only annual profit in the past five years.
A filing about the merger gives Widmer's 2007 net sales as $75.2 million, up from $60.4 million the previous year. Widmer has been profitable for at least the past five years, though its 2007 profit was negligible.
Redhook executives will discuss fourth-quarter earnings during a conference call at 8:30 a.m. Friday. It can be accessed through the company's Web site, www.redhook.com.
Melissa Allison: 206-464-3312 or email@example.com
Copyright © 2008 The Seattle Times Company
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