The directors of the brewer Lion Nathan Ltd have agreed to sell to the Japanese company Kirin.
According to Australia’s second-biggest brewer, Kirin will pay the equivalent of $12.22 for each share it does not already own.
The price includes $11.50 per share to be paid by Kirin, and another 72 cents to be paid by Lion Nathan as a fully-franked cash component.
Lion Nathan is Australia’s second-biggest brewer, with brands including XXXX, Tooheys, Boag’s, James Squire, Heineken, Beck’s and Hahn.
The deal values Lion Nathan at $6.5 billion on an equity basis, and $8.2 billion on an enterprise basis, Lion Nathan said.
The independent board said it would recommend the offer, subject to a satisfactory implementation agreement and confirmation from an independent expert that Kirin’s offer is in the best interests of shareholders. No superior proposal was offered.
Kirin already holds 46.13 per cent of Lion Nathan. It also owns the Australian food, juice and dairy-products group National Foods.
The agreement comes after confidential talks between the two companies since midway through last week.
Kirin’s offer represents a 47.1 per cent premium on Lion Nathan’s closing share price on April 22, the day before it lodged an indicative proposal.
Lion Nathan chairman Geoff Ricketts said the Kirin offer was compelling.
“We believe this is a very attractive outcome for Lion Nathan’s non-Kirin shareholders,” he said in a statement.
“It is a compelling offer at a significant premium.
“The company has provided strong shareholder returns over the last few years.
“For non-Kirin shareholders who did not exit the business through Kirin’s initial acquisition in April 1998, the offer consideration implies a total shareholder return of 338 per cent compared to 101 per cent for the ASX S&P200 over the same period.”
Lion Nathan understands it will be an integral part of Kirin’s growth strategy in the region, the company said.
It will create “exciting employment opportunities” for existing management and people across the group.
Lion Nathan management have had no engagement with Kirin about their roles so far.
Lion Nathan has engaged Caliburn Partnership as its financial adviser and Mallesons Stephen Jaques as legal adviser.