Australia: Lion Nathan is trying to get the support of Adelaide private school
Lion Nathan has requested an urgent meeting with Adelaide private school Prince Alfred College over its A$18.2 million stake in Coopers Brewery Ltd., The Advertise News published on September 29. Lion is trying to get the school, and its crucial 5.2 % stake, on side before an extraordinary meeting on October 20 when shareholders will vote to strip Lion of its share purchase rights.
A key weapon in Lion's arsenal will be the fact that if the college indicates it will support Lion's A$352 million hostile takeover bid, it will receive the $18.2 million within one month.
At 5.5 % interest, Prince Alfred College will forgo at least A$83,000 a month if it does not accept the offer. That compares with the $63,096 in dividend payments it would have received for its 70,106 shares in 2003-04 - the last year for which an annual report is available. If Lion's takeover bid fails, the school must return the principal, but not the interest. A resolution to the takeover issue could take as little as a month but is likely to stretch for much longer.
If Lion was to up its bid, to, for example, A$300 a share, the school will be paid the difference. This comes at a time when the school has A$15 million in capital works planned over the next five years. The school's strategic plan says: "To progress the plan a major commitment from the Prince Alfred College Foundation is required".
The school's fundraising foundation is attempting to raise A$3.7 million over five years to build a gymnasium and library and continue restoring the main building.
Lion chief executive Rob Murray is understood to have written to the school requesting a meeting with the school council. The school is understood to have been given the shares as a bequest from a former Coopers family member. School business director David Stewart did not return calls yesterday.
To remove Lion Nathan's right to buy shares, Coopers needs 75 % of shareholders present on October 20 to support a resolution to that effect. Such a move will severely limit shareholders' ability to sell shares.
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