Lion Nathan's rights voted out

MELBOURNE - Shareholders in Australia's Coopers Brewery have voted to remove Lion Nathan's pre-emptive rights over its shares, derailing a A$420 million ($450 million) hostile bid from Lion for the unlisted brewer.

Lion Nathan's pre-emptive rights had entitled it to be offered shares that come up for sale in Coopers after they are first offered to existing shareholders and pension fund interests.

Coopers said the proposal to remove Lion Nathan's rights was supported by 93.42 per cent of the shares voted at a special meeting yesterday in Adelaide.

The rights had also exempted Lion Nathan from a rule in the Coopers constitution that prevents the sale of shares to a competitor. Removal of the rights effectively halts Lion Nathan's A$310-a-share bid, raised last month from A$260.

Lion Nathan, whose brands include Tooheys and Steinlager, said this week that it would likely lose the vote unless the Coopers board changed its recommendation against the bid.

But it flagged that legal action could leave the door open for it to pursue a takeover of the maker of Coopers Sparkling Ale and Coopers Original Pale Ale.

The South Australian brewer was established by Thomas Cooper in 1862 and a report it commissioned from investment firm Grant Samuel says the Cooper family still hold about 90 per cent of shares on issue.

The company has just 118 shareholders.

Coopers has a 3 per cent share of the Australian beer market but says it has a 12 per cent share in premium beer, a market pursued by brewers for its stronger earnings growth.

Australia's beer market is dominated by Foster's and Lion Nathan. The latter's offer for Coopers represents a multiple of 13.7 times forecast earnings before interest, tax, depreciation and amortisation of A$31.6 million.

Shares in Lion Nathan, 46 per cent owned by Japan's Kirin Brewery, added 12Ac to A$7.34 yesterday.

- REUTERS