Provide an investment recommendation

Dear Management Team,

Financial Impact of supply chain interruptions
• Minimal financial impact in the short term given it has had minimal effect on the financial projections in the years following FY 21.Therefore, we do not use this as a strong reason to
significantly lower your bid nor it is an indication of future financial distress

• Given the long term nature of this investment and the intangible (synergy value) value of this investment , we do not see this fire as a material issue either.

Bidding Dynamics

 The information regarding bidding on HappyHour CO. from the NY/HK Times to be credible. Due to several large strategic firms searching for opportunities to expand we can expect a highly
competitive bidding environment

 If worldwide Brewing is expecting to extract higher value from synergies than some of the bidding competition , this leaves an opportunity to pay a higher price.

Valuation Adjustment

 FY 21 Revenue of $1,100mm (down-4.5)

 50% Gross margin
 Management expects to revert to orginally forecasted sales in FY 22 and thereafter

This has resulted in a revised NPV of $803mm , an equity value of #654 from $718mm and offer share price of 329 cents from 361 cents,.

Net present value based on perpetuity growth method

Preliminary valuation Revised Valuation (post fire)
Value Based on 8.5%WACC & 0.5% TGR. Amount($m) %ofNPV Value Based on 8.5%WACC & 0.5% TGR. Amount($m) %ofNPV
Present Value of Cash Flows 409 50.90%
PV of Terminal Value 394 49.10% Present Value of Cash Flows 345 46.70%
PV of Terminal Value 394 53.30%
Implied Firm NPV 803 100.00% Implied Firm NPV 739 100.00%
Net debt as of Mar -20E -85 Net debt as of Mar -20E -85

Implied equity value 718 Implied equity value 654

Implied offer share price © 361 Implied offer share price © 329
%premium to current 118.80% %premium to current 99.30%

J.P.Morgan