 | E-Malt.com News article: Japan & Australia: Analysts compliment Kirin for deciding to gain full ownership of brewer Lion Nathan
Analysts say Japanese beer-maker Kirin Holdings has made a good offer to secure full ownership of trans-Tasman brewer Lion Nathan Ltd and expect that the transaction will be completed, the Age posted on April, 28.
UBS analyst Lindy Newton said Kirin's offer of A$12.22 per share - a 53 per cent premium to Lion Nathan's one-month volume weighted average price - was "very attractive" compared to other premiums of 20 to 30 per cent for control of a company.
"Given the attractive offer price, no `market out' clauses (such a clause enables a bidder to withdraw if the market falls) and no contesting bids, we see low risk of this deal not completing," Ms Newton said in a briefing note to clients.
Merrill Lynch analyst Penny Heard said Kirin was paying an acquisition multiple for Lion Nathan that was broadly in line with recent acquisition multiples in the sector, which was a very positive outcome given current market conditions.
"The fact that such a multiple can be achieved despite the absence of a competing bidder is a testament to the current strength of the Lion Nathan business and management team," Ms Heard said in a research note.
Ms Heard said the key question for the beer industry, assuming the deal was completed, was what type of competitor would Kirin be.
"In the past, Kirin has sought to tie up local management, and this would be a positive for the beer industry in our view," she said.
"But with ultimate control now in the hands of a foreign owner that typically works off lower margins, a major uncertainty now overhangs the Australian beer industry."
The takeover of Lion Nathan by Kirin is subject to approval by the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB), which Lion Nathan does not expect to be a problem.
The deal, which will be implemented via a scheme of arrangement, may be finalised by September.
30 April, 2009
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