Well, it's been a big week in the battle, with the Australian Competition and Consumer Commission saying it had problems with the proposed takeover, and Lion Nathan having two losses in court.
LN is now seeking leave to appeal to the High Court in relation to a ruling by the full bench of the South Australian Supreme Court.
And it seems that analysts are sceptical about whether LN will succeed.
Here are some articles that sum up what happened this week, starting with the court action. The last article is about the ACCC, which was earlier in the week.
Go Cooper's!
Oliver
Australia's Coopers Scores Legal Victory Against Lion
Friday November 18, 3:19 PM
By Richard Noonan
http://sg.biz.yahoo.com/051118/15/3wmy8.html
MELBOURNE (Dow Jones)--Australian brewer Coopers Brewery Ltd. on Friday scored a major victory in its battle to fend off a hostile takeover bid by Lion Nathan Ltd. (LNN.AU) when a Melbourne court moved to allow an extraordinary general meeting of the target's shareholders to proceed.
In a decision that threatens to derail Lion Nathan's A$352 million offer, Federal Court judge Alan Goldberg discharged a temporary injunction against the planned Coopers meeting, subject to agreed undertakings to the company's shareholder documents.
The privately-owned Coopers plans to hold the meeting on Nov. 29 to vote on changes to the company's constitution to remove Lion Nathan's existing pre-emptive rights to buy shares and effectively prevent Lion Nathan from owning Coopers shares.
Justice Goldberg ordered Coopers to provide more information to its shareholders on a valuation from the company's auditor KPMG.
In September, Lion Nathan bid A$260 a share for Coopers. KPMG subsequently valued Coopers shares at A$190 apiece in the absence of the Lion Nathan offer, while independent expert Grant Samuel has put a value on Coopers of between A$284 and A$320 a share.
Ahead of the court decision, some analysts suggested that Lion Nathan is unlikely to secure a stake in Coopers if its pre-emptive rights regime is removed.
"Unless Lion Nathan can stop Coopers from striking out its exemption..., it will not be able to hold any shares," JPMorgan said in a note to clients on Friday.
"Lion Nathan is unlikely to own any shares in our opinion," the broker said.
Meantime, in a separate legal matter related to the takeover, Lion Nathan said Friday it has sought leave to appeal in the High Court to try to overturn an earlier Supreme Court decision related to its pre-emptive rights.
Last month, Coopers successfully applied to cancel a decade-old agreement that gives Lion Nathan a pre-emptive right to buy Coopers shares offered for sale by any shareholder.
Coopers claimed in its lawsuit that Lion Nathan forfeited its pre-emptive right when Japanese brewer Kirin Brewery Co. (KNBWY) acquired a 45% stake in Lion Nathan about six years ago.
Lion Nathan chief Rob Murray said in a statement the company "will continue to pursue all available avenues" to ensure that Coopers shareholders can consider the bid on its merits.
Shares in Lion Nathan closed up 1 cent at A$7.49. The court order was announced after the market closed.
ACCC hops into Lion over takeover
Blair Speedy
November 17, 2005
http://www.theaustralian.news.com.au/co ... 43,00.html
THE competition regulator has dealt a blow to Lion Nathan's hostile takeover bid for Coopers Brewery, saying it would increase barriers to entry for new beverage players and reduce competition in the beer market.
In a statement of issues released yesterday, the Australian Competition and Consumer Commission said market enquiries suggested Coopers "might be a vigorous and effective competitor" to Lion and rival beverage giant Foster's.
The ACCC noted that discounting by Coopers had led Lion to cut the price of its premium beers in South Australia, while both Lion and Foster's had launched new ale-style beers aimed at luring drinkers away from Coopers' Original Pale Ale.
"More generally, market inquiries suggested that Lion Nathan was seeking to acquire Coopers to neutralise a growing and potentially significant brewer," the regulator said.
But it noted that rivalry between Lion and Foster's "might have a considerably more significant effect on competition in the beer industry", adding that it would seek more information on Coopers's influence before making a final decision next month.
The ACCC also said the acquisition could make it harder for new brewers to enter the market by removing Coopers's distribution network as a potential means to get their product out to market.
"Using either Lion Nathan or (Foster's) to distribute product could be problematic as these companies have an incentive to limit the growth of competing products in order to avoid cannibalising their own sales," the regulator said.
Coopers executive chairman Glenn Cooper said the ACCC comments raised significant questions about Lion's $352 million takeover bid.
"Coopers believes that Lion Nathan has made this bid to remove a competitor that has been hurting its market position."
Lion said it was pleased the ACCC had based its assessment of the impact of the deal on the national beer market rather than individual state-based markets, which could have led to competition hurdles in South Australia.
A successful merger would give Lion the vast bulk of the beer market in South Australia by combining the state's two most popular beer brands, Coopers and West End.
Lion also siezed on comments from accountancy firm KPMG and independent expert Grant Samuel contained in Coopers's target statement to undermine Coopers's proposal to top Lion's $260 per share takeover offer with a share buyback forecast to deliver $314 per share in nine months' time.
Coopers has proposed a buyback of up to 15 per cent of issued stock at $260 per share, to be followed by annual buybacks of up to 5 per cent.
The buyback price would increase in line with annual earnings, which the company has forecast will increase by more than 20 per cent this year, giving a forecast buyback price of $314 a share next year.
Lion chief executive Rob Murray noted the Grant Samuel report warned shareholder acceptances for the buyback could be materially scaled back if holdings exceeded 15 per cent of the stock.
If you want to read analysis of the ACCC statement, there's a Bryan Frith column here:
http://www.theaustralian.news.com.au/co ... 41,00.html