Brewery's takeover bid goes to court

Lion Nathan, Australia's second-largest brewer, yesterday lodged a formal appeal to the Supreme Court of South Australia in an effort to preserve pre-emptive rights to acquire shares in rival Coopers Brewery.

Last week Coopers, the largely family-owned South Australian brewer, won its case to have those rights removed.

In its much anticipated appeal, Lion Nathan claims it has the right to buy Coopers shares when they are offered for sale and not acquired by existing investors.

Lion Nathan argues that it was granted those rights in 1995 when its South Australian Brewing unit agreed to exchange its 19.9 per cent stake in Coopers for the rights.

"We owe it to our shareholders to defend our position," said Lion Nathan's chief executive, Rob Murray. "It is disappointing that they should seek now to remove them."

Lion Nathan said it would argue that Japan's Kirin Brewery, owner of 46 per cent of the brewer, holds no relevant interest to vote or dispose of shares in the Australian company.

It would also argue that the change of control provisions within Coopers' constitution applied to that particular brewery, not to Lion Nathan.

Moreover, Lion Nathan would refute Coopers' claim that Kirin's purchase of shares in Lion Nathan amounted to a change in control and thereby allowed Coopers to hold a shareholder vote to remove the rights.

Lion Nathan, a dual-listed company that had its origins in New Zealand but is now based in Sydney, has launched a hostile $396 million takeover of Coopers.

This week, Coopers' board of directors rejected the offer, urging shareholders to do the same.

In order for Lion Nathan's pre-emptive rights to be removed, at least 75 per cent of Coopers' shareholders must support it.

Coopers has also accused Lion Nathan of deceptive conduct before the Australian Competition and Consumer Commission.

It claimed Lion Nathan did not tell investors they were required to offer units for sale to other shareholders and to AMP before offering them to outside buyers.

The play for Coopers

* Lion Nathan has launched a $396 million hostile takeover bid for Coopers Brewery.
* Coopers has a 2.5 per cent share of the national Australian beer market, 24 per cent of its home market in South Australia.
* It is a public unlisted company with 117 shareholders.
* Brands include Cooper's Sparkling Ale and Original Pale Ale.
* Lion Nathan is Australia's second-largest brewer behind Foster's.
* It has a 42 per cent stake of the market.
* The company is 46 per cent owned by Japan's Kirin Brewery.
* Brands include Tooheys and Hahn.