Charlie's ripe for Asahi picking

Charlie's co-founder and chief executive Stefan Lepionka will stay on to head the company after Asahi takes over. Photo / Natalie Slade

Asahi Beverages looks almost certain to become the new owner of Charlie's Group after the major shareholders said yesterday they had agreed to sell their combined 52.17 per cent stake to the Japanese brewing giant.

Asahi, through its subsidiary Schweppes Australia, is offering 44c a share - a 57 per cent premium to Friday's closing price - valuing the fruit juice and beverage company at $129.3 million.

The offer, which has the backing of the Charlie's board, is subject to Asahi obtaining acceptances for 90 per cent of the shares and to Overseas Investment Office approval.

Charlie's shares shot up 15c to 43c on the back of the news.

Asahi is known to be keen to expand beyond Japan. It also announced yesterday it had agreed to buy the mineral water and juice business of Australia's P&N Beverages for A$188 million ($243 million).

In 2009, Asahi bought Cadbury's Schweppes Australia for £550 million ($1.06 billion).

Tokyo-listed Asahi has entered into lock-in agreements with interests associated with the founders of Charlie's - Stefan Lepionka, Marc Ellis and Simon Neal - and Collins Asset Management and Charlie's director Tim Cook.

Asahi intends to continue to operate the Charlie's business as a standalone business, with Lepionka staying on as chief executive.

David Beguely, managing director of Schweppes Australia, said the acquisition would enhance Asahi's position in the premium beverage segment and provide a foothold in New Zealand.

"Our plan is to continue to run Charlie's very much as it is run today, and then to support its growth through the technical ability that we have got, and through the extended reach that we have outside of New Zealand," he said. "We would love to see Charlie's being twice the size in five years' time as it is today."

Charlie's makes and markets a range of "not from concentrate" and organic beverages. Its main brands are Charlie's and Phoenix Organics. The business was established in 1999 and floated on the New Zealand Stock Exchange, through a backdoor listing, in July 2005.

Lepionka said it had been 12 years to the day since he and partners Marc Ellis and Simon Neal first began squeezing oranges.

"The international beverages business is a tough, competitive game and we have played the game hard and well over the last decade," he said.

"In that time we have grown from a start-up to around $50 million in sales a year, built an iconic brand in Charlie's, and purchased another in Phoenix."

He said Asahi had the resources and reach to capitalise on the position Charlie's had achieved to date.

"Our goal was to achieve a $100 million business and I guess we have over-achieved that today," Lepionka said. He said the company had fielded other offers over the last few years.

Lepionka and Ellis, who have made a name for themselves as the cheeky marketers of Charlie's brands, will be walking away with about $18 million each from the deal, but they aren't ruling out future Charlie's-style projects.

"Most certainly it has been an interesting 12 years and we have learned plenty along the way," Ellis said.

Similarly, Lepionka saw other opportunities.

"We are passionate New Zealanders and of course we are are passionate about NZ Inc," he said.

"We will be looking for opportunities and I think there are lots of them in New Zealand," he said. "I think that if we can rub something of what we have achieved on to something else, then it could be good for Round Two."