Coopers paws back at Lion

Transtasman brewer Lion Nathan will appeal a court decision in relation to takeover target Coopers Brewery's attempts to remove pre-emptive rights held by Lion Nathan over its shares.

Lion Nathan launched an A$352 million ($384 million) takeover bid for South Australian-based Coopers on Thursday.

In the South Australian Supreme Court yesterday, Justice John Perry ruled in favour of Coopers' bid to remove a clause from its constitution that gives Lion Nathan first right to buy its shares.

He found that when Japanese brewer Kirin bought a 46 per cent stake in Lion Nathan almost 10 years ago, its business structure had changed.

Lion Nathan said it would immediately appeal the Supreme Court decision.

"We intend to immediately appeal to a full court of the Supreme Court of South Australia, as we have a duty to our shareholders to defend the rights that Coopers chose to grant Lion Nathan in 1995," said Lion Nathan chief executive Rob Murray.

He said the court decision was not unexpected and was just the first step in a long legal journey that Coopers would need to undertake to remove Lion Nathan's rights.

If Coopers was ultimately successful after appeal, it would require a special resolution supported by at least 75 per cent of Coopers shareholders for Lion Nathan's rights to be affected.

The Coopers board said it would meet soon to consider the implications of the court judgment.

Managing director Tim Cooper welcomed the court decision but said it might not help the company fight off the takeover bid.

"Nothing changes from that perspective. Clearly, the board has to meet now and give consideration to the result and then we can make our next move."

Lion Nathan is offering A$260 in cash for each Coopers share.

Coopers, whose brands include Coopers Original Pale Ale and Coopers Sparkling Ale, is an unlisted public company based at Regency Park in South Australia.

Lion Nathan's third-tier pre-emptive rights allows it to acquire Coopers shares when they are offered for sale but not acquired by existing shareholders or the Coopers superannuation fund.

Lion Nathan said it was also exempt from provisions in the Coopers constitution preventing competitors from being registered as shareholders in the company.

The rights were granted to Lion Nathan in 1995 in exchange for a 19.9 per cent stake in Coopers, which Lion Nathan owned after its acquisition in 1993 of the South Australian Brewing Co.

- AAP