Business as usual in NZ, says takeover target Lion Nathan

Lion Nathan's directors and Kirin have reached a deal on a full takeover. Photo / Brett Phibbs

Brewer Lion Nathan said it is business as usual in New Zealand where it employs 1300 people as its Japanese shareholder Kirin bids for the shares it does not own in company.

Lion Nathan said its independent board committee and Kirin had agreed on a deal under which Kirin would acquire all of the issued shares in Lion Nathan that it does not already own for the equivalent of A$12.22 ($15.62) per share.

The takeover will need the approval of New Zealand's Overseas Investment Office but this is not expected to be a problem as the company is already 46 per cent owned by Kirin.

The company said the takeover will not affect its plan to build a $250 million brewery at East Tamaki in Auckland. The company has sold its brewery site in Newmarket.

The company's annual report shows there are 5829 New Zealand shareholders with a total 23 million shares.

The takeover price includes A$11.50 per share to be paid by Kirin, and another 72 cents to be paid by Lion Nathan as a fully franked cash component.

The deal values Lion Nathan at A$6.5 billion on an equity basis, and A$8.2 billion on an enterprise basis, Lion Nathan said in a statement on Monday.

The Lion Nathan independent board committee said it would recommend the offer, subject to a satisfactory scheme implementation agreement, no superior proposal being offered, and confirmation from an independent expert that Kirin's offer is in the best interests of Lion Nathan's shareholders.

Lion Nathan is Australia's second biggest brewer, with brands including XXXX, Tooheys, Boag's, James Squire, Heineken, Beck's and Hahn. It has half of the New Zealand market.

The agreement comes after confidential talks between the two companies since midway through last week.

Kirin's offer of A$12.22 per Lion Nathan share is at a 47.1 per cent premium to Lion Nathan's closing share price of A$8.31 on April 22, the day before it lodged an indicative proposal.

Lion Nathan chairman Geoff Ricketts said the Kirin offer was compelling.

"We believe this is a very attractive outcome for Lion Nathan's non-Kirin shareholders," he said in a statement.

Lion Nathan understands it will be an integral part of Kirin's growth strategy in the region, the company said.

- NZPA