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Lion Nathan shareholders approve takeover

Published: 12:57PM Thursday September 17, 2009 Source: ONE News / Reuters

Well-known New Zealand beer brands will move into the control of the Japanese, after trans-Tasman brewer Lion Nathan Ltd shareholders approved a merger with Japanese brewing giant Kirin to create the country's largest food and drinks group.

Lion Nathan's beer brands include Speights, Lion Red, Steinlager, Mac's craft beers, Heineken, Beck's and Hahn.

Lion Nathan also has a small wine portfolio that includes the Stonier, Petaluma, Knappstein and Tatachilla labels, among others.

Lion Nathan shareholders on Thursday voted overwhelmingly for a $A3.5 billion takeover deal that will see Kirin, which was already Lion Nathan's controlling shareholder, acquire the rest of the Lion Nathan shares that it does not already own.

At a meeting in Sydney, almost 92% of Lion Nathan shareholders who cast votes voted in favour of a scheme of arrangement under which Kirin will buy the 53.87% of Lion Nathan shares that are held by other shareholders, for $A12.00 each.

Kirin, which recently acquired food, juice and dairy products group National Foods, will combine its two subsidiaries and call it Lion Nathan National Foods Pty Ltd.

This company will become the largest supplier to Australian supermarkets.

Lion Nathan chairman Geoff Ricketts said shareholders were getting an "excellent price" and that the brewer would have a great future as an Australasian company.

"In the Lion Nathan story which dates back to 1840, one chapter closes another one opens," Ricketts told shareholders at a meeting to consider the scheme of arrangement to facilitate the deal on Thursday.

"The ownership does move to 100% Kirin but they demonstrated over 10 years that they're prepared to invest in the business and employ good people," he said.

"So the company will carry on."

Most shareholders were happy with the deal but some were sad to see Australia's second-largest brewer bought out.

"The company is not disappearing," Ricketts said.

"It will still be a great Australasian company.

Lion Nathan's senior management team would become the management team for Kirin's Australasian operations, with Lion Nathan chief executive Rob Murray to head Kirin's Australasian operations.

Kirin's Australasian operations would be conducted out of Lion Nathan's headquarters in Sydney.

Ricketts said he had no regrets about the takeover.

But he said that if Lion Nathan's bid to buy Coca-Cola Amatil Ltd (CCA) earlier this year had succeeded, "this transaction wouldn't have happened".

The takeover by Kirin was unanimously endorsed by Lion Nathan's board and emerged in May when the brewer signed an agreement to implement a scheme of arrangement.

The deal valued Lion Nathan at about $A6.5 billion on an equity basis, and $8.2 billion on an enterprise basis, which includes debt.

Lion Nathan paid an interim dividend of 22 cents per share on June 23, 2009, which had the effect of adjusting the total original offer consideration from $A12.22, which included the interim dividend, to $A12.00 per share.

The $A12.00 cash payment comprises consideration of $A11.50 for each Lion Nathan share to be paid by Kirin and a special dividend of 50 cents per share to be paid by Lion Nathan.

For the deal to go ahead at least 50% of those present needed to vote in favour of the takeover, and at least 75% of votes cast needed to be in favour of the deal. Kirin did not vote.

Austock Securities senior client adviser and strategist Michael Heffernan said the approval of the takeover deal was no surprise.

"It was like a consummation of a marriage," Heffernan said.

"Lion Nathan have done very well over time and it's no doubt why Kirin made a pretty takeover offer for them."

The takeover will be implemented on October 21, pending court approval.

Lion Nathan shares closed two cents higher at $A11.95.