Australia: Coopers accuses Lion Nathan of intimidation in takeover bid
Coopers Brewery has outlined on December 6 the details of a “campaign of intimidation” being run by predator Lion Nathan and its CEO, Rob Murray in its attempts to take over the company.
Managing Director, Dr Tim Cooper, said the campaign of “schoolyard bullying” had underlined the questionable corporate governance of Lion Nathan and the lack of respect shown to Coopers shareholders.
“Lion Nathan has not been prepared to let Coopers shareholders decide whether they want Lion Nathan to have a special position on the Coopers share register with an advantage over other competitive brewers. Lion Nathan seems prepared to stop at nothing to prevent Coopers shareholders from determining what their constitution says,” he said.
Dr Cooper said a number of issues illustrated how these tactics appeared dubious and contrived:
“If Lion Nathan’s offer was worth accepting, then shareholders would vote against the changes to Coopers constitution and accept the offer, instead of Lion Nathan believing it needs to send dozens of letters and documents to various stakeholders including our auditor, independent expert, Directors and others,” he said.
“Lion Nathan has not been upfront with shareholders about what it is willing to pay them for their shares. Its first offered the Coopers Board $220 before announcing its takeover bid, it then set its initial takeover price at $260 before being forced to increase this to $310 per share. Lion Nathan has still not said whether it latest offer price is its best and final offer.
“It continues to manipulate, as illustrated by a document that was sent to shareholders urging them to vote against the EGM on 22 November.
“It was the height of hypocrisy for Lion Nathan to send this document to Coopers shareholders while at the same time it was using every legal tactic it could think of to try and prevent shareholders from exercising their right to meet and consider this important issue.
Dr Cooper said shareholders made decisions based on performance
“The fact of the matter is, that Coopers performance over the last 10 years has been amazing. Its share price has increased from $7.15 to an offered $310 in this time, a compound annual growth rate of 46% per year. Even at $260 (being the current buyback price) this represents an increase of 43% per annum. Lion Nathan’s share price has not increased by anywhere near as much as this.”
Coopers performance just keeps getting better.
• In 2005 we reported a record revenue result
o Sales were up by 18.4% to $126.6m,
o Profit increased by 51.8% to $14.3m and
o Dividends increased 107.7% to $4.05 per share.
o Coopers is just about debt free
• In 2006 we expect
o Sales to increase 15.3% to $146.0m,
o Profit to increase by 26.2% to $18.0m and
o Dividends to increase 48.1% to $6 per share.
• Our beer volume should exceed 50 million litres in 2006 for the first time in our history.
Dr Cooper said Lion Nathan decided to sell out of Coopers 10 years ago for only $7.15 per share.
They had now changed their mind given Coopers performance has improved and offered $310 per share. “Based on the actions of Lion Nathan, Coopers shareholders must be ecstatic with the performance of their investment and the Board and management. There is no wonder as to why Coopers shareholders are so loyal to us,” he said.
Dr Cooper said Lion Nathan shareholders did not have the same reason to be happy.
He said Lion Nathan was losing market share in South Australia and shareholders would be asking what would happen to Rob Murray and the Lion Nathan share price if it failed to win control of Coopers.
“Lion Nathan has made questionable investment and/ or tactical decisions in our eyes in the past such as their turnaround strategies and heavy consequential losses associated with their China operations and Victorian pubs foray,” he said.
Respect shareholders rights
Dr Cooper said the EGM to remove Lion Nathan from the Coopers constitution was requisitioned by shareholders, not the Board, on 8 September 2005 following a decision in the Supreme Court of South Australia that there had been a change in control in Lion Nathan.
“Lion Nathan should now be prepared to let shareholders express their views at this important meeting,” he said.
“The issues in the shareholders eyes are simple - if they want to keep Lion Nathan's bid open on any terms, they will vote against the resolution. If they are not interested in Lion Nathan becoming a shareholder and / or offering for their shares, they will vote for the resolution.
Wstecz
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