Lion Nathan approached by Kirin for full takeover

Photo / Richard Robinson

Trans-Tasman brewer Lion Nathan has been approached by its biggest shareholder, Japanese beer-maker Kirin Holdings, to buy the remaining stock in the company.

Lion Nathan is Australia's second largest brewer and one of the biggest names in New Zealand brewing. Its beer brands include Lion, XXXX, Tooheys, Boag's, James Squire, Heineken, Beck's and Hahn.

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

Lion Nathan requested a trading halt today in its shares while it holds confidential talks with Kirin.

The talks follow Kirin's approach after the close of trade on Wednesday with an indicative, non-binding, conditional and confidential proposal to buy Lion Nathan's remaining shares.

Lion Nathan said it would establish an independent board committee to clarify the details of the Kirin offer on behalf of the remaining shareholders.

The trading halt will remain in place until an announcement is made, or Monday April 27.

Research director at The Intelligent Investor, Greg Hoffman, said many Japanese companies were cashed up as the yen had strengthened over the last nine months or so.

"That makes it more attractive for them to buy (assets)," Mr Hoffman said.

Hoffman said that when Lion Nathan had moved late last year to acquire soft drinks maker Coca-Cola Amatil Ltd for $7.6 billion ($13.91 billion) - which was ultimately unsuccessful - Kirin had wanted to increase its stake in Lion Nathan at that time.

"But that deal fell over, and they weren't able to increase their stake. This is obviously plan B," he said.

Lion Nathan had intended to place new shares with Kirin to raise funds for the cash component of its cash-and-scrip offer for Coca-Cola Amatil.

In February, Lion Nathan reaffirmed its guidance for fiscal 2009 and said the performance of its core beer business was "very encouraging" in the first quarter.

But its much smaller wine operations were being adversely affected by the economic downturn.

Lion Nathan had said it remained on track for a step-up in earnings in fiscal 2009 and reaffirmed its operating net profit guidance of $300 million to $315 million.

Lion Nathan shares closed at $8.31 on Wednesday.

Shares in global beverages firm Foster's Group Ltd jumped more than six per cent in early trading on Thursday.

At 1154 AEST on Thursday, Foster's was up 30 cents, or 6.19 per cent, at $5.15.

Hoffman said Foster's was probably benefiting from some takeover speculation as a result of Kirin's move on Lion Nathan.

- AAP