Lion Nathan agrees to Kirin takeover

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

Brewer Lion Nathan's directors and Japanese predator Kirin have reached an agreement on a deal for Kirin to acquire Lion Nathan.

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 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 buillion on an enterprise basis, Lion Nathan said in a statement issued today.

The Lion Nathan independent board comittee 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, Beck's and Hahn.

Kirin already holds 46.13 per cent of Lion Nathan and it owns Australian food, juice and dairy products group National Foods.

The agreement comes after confidential talks between the two companies since mid-way 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.

"It is a compelling offer at a significant premium to Lion Nathan's share price.

"The company has provided strong shareholder returns over the last few years.

"For non-Kirin shareholders who did not exit the business through Kirin's initial acquisition in April 1998, the offer consideration implies a total shareholder return of 338 per cent compared to 101 per cent for the ASX S&P200 over the same period."

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

It will create "exciting employment opportunities" for existing management and people across the group.

Lion Nathan management have had no engagement with Kirin relating to their roles so far.

Lion Nathan has engaged Caliburn Partnership as its financial adviser and Mallesons Stephen Jaques as legal adviser.

- AAP