AUS: Lion to acquire rest of Little World Beverages

By | 18 June 2012

Lion is due to take full control of Little World Beverages

Lion is due to take full control of Little World Beverages

Lion has agreed to fully aquire Little World Beverages, adding to the 36% stake it already holds in the company. 

The Kirin Holdings-owned firm announced today (18 June) that it has reached an agreement with the board of Little World Beverages to acquire 100% of the company, which will recommend the deal to its shareholders. Little World is best know for its craft beer brand Little Creatures.

Lion said it values the Fremantle-based firm at AUD381.6m (US$386m) and plans to offer shareholders AUD5.30 per share in cash.

“Lion has a long history of supporting the Little World Beverages business and we believe there is now a fantastic opportunity through Lion’s scale distribution system to get these great brands to more beer lovers, while respecting the craft brewing ethos of the Little World Beverages brands, breweries and hospitality venues," said Lion's CEO Rob Murray.

Murray said the company deserved enormous respect for building Little Creatures into "one of Australia’s leading craft beer brands".

A Little World Beverages shareholders meeting is expected to be held in October to approve the deal. 

Last week, Lion announced it has captured the brewing rights for Guinness and Kilkenny in Australia from its rival, SABMiller-owned Foster’s.

Show the press release

Little World Beverages Board Recommends Lion Offer to Acquire 100% of Little World Beverages by Scheme of Arrangement

June 18, 2012

Lion confirmed today that it has reached an agreement with the Board of Little World Beverages to acquire the shares in Little World Beverages it does not already own by way of a Scheme of Arrangement (“Scheme”). Under the Scheme, Lion proposes to offer Little World Beverages shareholders $5.30 per share in cash (“the Offer”) subject to the successful implementation of the Scheme. 

The cash consideration of $5.30 per share will be reduced by the amount of any dividend declared by Little World Beverages prior to the Scheme becoming effective (the “Offer”).

This Offer provides a highly attractive outcome to Little World Beverages shareholders. It values Little World Beverages at a total enterprise value of $381.6 million and represents:

  • a multiple of 23.1 times Little World Beverages’ FY11 EBITDA (Little World Beverages’ last published annual accounts) and 20.3 times Little World Beverages’ EBITDA for the 12 months to 31 December, which compares favourably with precedent transactions and sector trading benchmarks;
  • a 39.8% premium to $3.79 per share, Little World Beverages’ last ASX closing price on 15 June 2012;
  • a 45.0% premium to $3.65 per share, Little World Beverages’ one month volume weighted average ASX closing share price (“VWAP”) up to and including 15 June 2012;
  • a 44.9% premium to $3.66 per share, Little World Beverages’ three month (“VWAP”) up to and including 15 June 2012; and
  • a 49.6% premium to $3.54 per share, Little World Beverages’ six month (“VWAP”) up to and including 15 June 2012.

Rob Murray, Chief Executive Officer of Lion, said: “This is a very compelling offer for Little World Beverages shareholders and we are pleased the Little World Beverages Board has agreed to recommend it to its shareholders.

“Lion has a long history of supporting the Little World Beverages business and we believe there is now a fantastic opportunity through Lion’s scale distribution system to get these great brands to more beer lovers, while respecting the craft brewing ethos of the Little World Beverages brands, breweries and hospitality venues.

“Lion has a strong record of nurturing and preserving the entrepreneurism that has made boutique beer and wine brands like James Squire, Knappstein, Petaluma and St Hallett great, and will continue to invest in the Little World Beverages’ brands in the same manner.

“Lion holds Little World Beverages’ founders and management team in the highest regard. They deserve enormous respect for building Little Creatures into one of Australia’s leading craft beer brands,” said Rob.

The Independent Directors of Little World Beverages have confirmed that they intend to unanimously recommend that Little World Beverages’ non-Lion shareholders vote in favour of the Scheme and each of the LWB Directors intends to vote in favour of the Scheme in relation to the LWB shares held or controlled by them (which amount to approximately 35% of the total current LWB shares on issue), in the absence of a superior proposal and subject to confirmation by an independent expert that the Scheme is in the best interests of shareholders.

Conditions of Lion’s Offer

The implementation of the Scheme is subject to a limited number of customary conditions, including:

  • issue of ASIC & ASX consents, waivers, modifications and approvals necessary to implement the Scheme;
  • approval from the Foreign Investment Review Board;
  • approval of the Scheme by Little World Beverages shareholders and the Court;
  • an independent expert (appointed by the Independent Directors of Little World Beverages) confirming that the Scheme is in the best interests of Little World Beverages’ shareholders; and
  • other customary conditions such as no material adverse change in the Little World Beverages business.

Next Steps

A Scheme Booklet with full details of the Offer, including an independent expert’s report, is expected to be dispatched to Little World Beverages shareholders in September 2012.  The scheme meeting to approve the Scheme is expected to be held in October 2012.

Advisers

Greenhill Caliburn is acting as financial adviser to Lion and King & Wood Mallesons is acting as its legal adviser.

Original source: http://www.lionco.com/2012/06/18/little-world-beverages-board-recommends-lion-offer-to-acquire-100-of-little-world-beverages-by-scheme-of-arrangement/

Sectors: Beer & cider, Mergers & acquisitions

Companies: Kirin, Guinness, SABMiller

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