Time called on Lion Nathan stock listing

The beer powerhouse will disappear in the wake of the Kirin takeover. Photo / Martin Sykes

Tomorrow marks the end of the line for one of New Zealand's oldest and once most powerful companies, Lion Nathan, as a sharemarket entity whose controversial history helped shape today's Takeovers Code.

Lion's shares will be delisted from the NZX and ASX after Japanese brewer Kirin's successful takeover offer for the 54 per cent of the company it does not already own at total consideration of A$12.22 ($14.99) a share.

The company, which has more than 50 per cent of the beer market in New Zealand and more than 40 per cent in Australia, had its beginnings in an Auckland brewery founded by John Logan Campbell in 1840.

After two decades of consolidation in the industry, New Zealand Breweries, as it was then called, became Lion Breweries in 1977.

Controversial businessman Doug Myers, whose family had been associated with the company for decades, bought 19.9 per cent of Lion in 1981. Several years later he orchestrated the takeover of New Zealand's largest retailer LD Nathan & Co, buying a large chunk of the company's stock from merchant bank Fay Richwhite to form Lion Nathan.

Lion Nathan acquired Australian tycoon Alan Bond's brewing assets in the early 1990s, including the Tooheys Brewery in Sydney and Castlemaine Perkins in Brisbane.

Kirin acquired a 45 per cent stake in 1998.

"When that occurred it sparked a lot of arguments about our 'wild west' Takeover Code at the time," said Kevin Rendell of Wellington broking firm Gould Steel and Co. "At that stage a lot of people couldn't participate as it was a partial takeover.

"That helped contribute to the Takeovers Code that we have now," he said.

"I would say the first Kirin bid certainly led to the implementation of the code," said business commentator Brian Gaynor, who wrote a detailed column about Lion Nathan when Kirin's full takeover offer was announced in May.

While the code was largely drafted by the time the first Kirin offer was made, said Gaynor, the proposal expedited its official application, as it happened just in time to derail Lion's subsequent bid to take over wine maker Montana.

Going back to the 1970s, Gaynor said Dominion Breweries and Lion were widely held stocks.

Even further back, when they were the only commercial entities associated with New Zealand's reigning cultural triumvirate of "rugby, racing and beer" breweries were even more dominant.

Two years after Kirin acquired its initial holding, Lion Nathan moved its headquarters to Australia. Around that time most New Zealand shareholders sold out for about $5 a share.

Given Kirin's $15 a share offer this year, "by hanging in there they could have done as well if not better".