By Joe Helm
Lion Nathan is close to selling its Australian and New Zealand Pepsi bottling franchise - again.
A report in the Australian newspaper yesterday quoted Lion Nathan chief executive Gordon Cairns confirming a buyer had been found for the franchise.
He said due diligence had been completed and a price agreed.
Mr
Cairns would not confirm the identity of the buyer but the latest speculation centres on Pepsi Inc of the United States which has a 16 per cent interest in the Australian and New Zealand bottling franchise.
In December 1997 Lion said it had failed to sell the Pepsi franchise to Cadbury Schweppes.
Late last year Lion said it would sell Pepsi in Australia and New Zealand separately.
Cerebos Greggs was believed to be interested in buying the New Zealand operation but no deal was ever done.
More recently there were rumours the New Zealand operation would be sold in a management buyout.
That was denied by local management at the time and again yesterday by Mr Cairns.
Lion took over the Pepsi franchise in 1990 from Cadbury Schweppes.
It made losses until last year when a minor $300,000 profit was reported.
Mr Cairns told analysts recently he was confident of recovering most of the $143 million book value of the Pepsi franchise in a sale.
Analysts estimate a sale at book value might add about 20c to Lion's share price which stood at $4.50 yesterday.
Proceeds from the Pepsi sale could be used for a share buyback or special dividend .
A share buyback was hinted at in 1997 and last year Mr Cairns said it was still being considered.
Peter Hallwright, a spokesman for Lion Nathan, yesterday played down the Australian report.
Mr Hallwright said he had nothing further to add.
The sale of the Pepsi franchise would be announced sooner or later and might even be announced when Lion reported on its first half at the end of the month.
