Coopers shareholders may block Lion Nathan takeover bid

Coopers Brewery shareholders will vote this month on whether to block Lion Nathan's takeover bid by removing its right to buy Coopers shares.

Lion Nathan, which has lodged a A$352 million ($387.5 million) takeover bid for the unlisted company, sought an injunction to block the meeting, but Federal Court of Australia Judge Alan Goldberg has said it should proceed.

The brewing giant's third-tier pre-emptive rights allow it to buy Coopers shares after they have been first offered to Coopers' existing shareholders and then to its AMP managed superannuation fund.

For the pre-emptive rights to be removed, 75 per cent of shareholders must vote in favour of the move.

Lion Nathan's lawyers told the court that Coopers board had a conflict of interest since they individually held major shareholdings in Australia's last family-owned brewery. Coopers told the court the claims were a "tactical application".

Judge Goldberg said while the October 20 meeting should proceed, Coopers might have to provide shareholders additional information, which Lion Nathan argues was left out of the explanatory memorandum sent to shareholders.

Lion Nathan said Coopers shareholders had not been told that by removing its rights the likelihood of getting the same price, A$260 a share, would be substantially reduced.

The Supreme Court of South Australia ruled last month that Lion Nathan should lose its pre-emptive rights because Japanese brewer Kirin's purchase of a 46 per cent stake in Lion represented a change in control. Lion Nathan is appealing that decision.

The Federal Court of Australia hearing on the matter continues today.

-additional reporting BLOOMBERG