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Trans-Tasman brewer Lion Nathan is reported to be considering issuing a hybrid equity instrument to help fund a A$1 billion ($1.15 billion) bid for New Zealand drinks group, Independent Liquor.
The Australian Financial Review reported the strategy today, without citing sources.
Hybrid equity is a form of permanent capital with characteristics both of debt and equity, and can include subordinated loans, redeemable preference shares, and convertible notes.
Lion Nathan was given a go-ahead in late October by the Australian Competition and Consumer Commission (ACCC) to proceed with a full bid for Independent Liquor. Lion had already received clearance from the New Zealand Commerce Commission.
The Commerce Commission said it cleared the proposed acquisition because of the strength of existing competitors and their ability to increase supply to the relevant markets.
Lion Nathan was one of an initial six bidders which had expressed interest in the A$1.2 billion ($1.4 billion) business.
Investment bank UBS, which is running the sale process, said in August it expected to have announced a buyer by Christmas.
The deadline for bids for Independent has been set for midday tomorrow, and it is expected that private equity firm CCMP Capital and a consortium comprising two other private equity operators, Pacific Equity Partners and Nikko Principal Investments, also submit bids for the business.
The privately held company was put on the market following the death of founder Michael Erceg in a helicopter crash one year ago.
Lion Nathan is 46 per cent-owned by Japan's Kirin Brewery Co Ltd.
- NZPA
