GAMMA Score on Wimm-Bill-Dann Foods Unaffected by Plans to Buy Out Its Shares Held by Groupe Danone

MOSCOW, Aug. 18 /PRNewswire/ -- Standard & Poor's Governance Services said today its GAMMA Score of GAMMA-7+ on Wimm-Bill-Dann Foods OJSC (WBD), a leading Russian dairy foods and beverages producer, is unchanged following the company's recent announcement that it had reached an agreement to purchase 18.4% of its shares currently held by Groupe Danone for a cash consideration of USD470 mln, pending regulatory approval of a joint venture between Groupe Danone and the Russian dairy company Unimilk.

Groupe Danone's exit may have positive implications for WBD's governance, in our opinion. For one, it would eliminate ambiguous ownership ties to a competitor. It would also allow shareholders the opportunity to appoint a board member with greater potential for independence than is currently the case with Mr. Jacques Vincent, Danone's representative on WBD's board. In the event, the choice on whether to take this opportunity to strengthen the company's board would remain with the shareholders.

However, we believe the volume of treasury shares warrants scrutiny given it may approach 24.4% of equity in the aftermath of a buyout. Under Russian law, treasury shares do not need to be cancelled if held by a subsidiary. We await clarity on WBD's plans for these shares as well as affirmation of its policy of not voting its treasury shares (which retain voting rights under Russian law) at shareholder meetings.

The opinions expressed are the independent opinions of Standard & Poor's Governance Services, a department of Standard & Poor's Equity Research Services, and do not reflect the opinions of other areas of Standard & Poor's.

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Information on corporate governance scores and GAMMA scores is available at www.governance.standardandpoors.com. Including the related report "GAMMA: Wimm-Bill-Dann Foods OJSC". Alternatively, contact Standard & Poor's on one of the following numbers: Moscow (7) 495-783-4000 or 4040.

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SOURCE Standard & Poor's