FYI | May 18 2006
By Rudi Filapek-Vandyck
Is former Kiwi and current Australian beer brewer and wine seller Lion Nathan (LNN) on the look out for acquisitions? Analysts at ABN Amro were fairly certain about it. But that was before today’s half year announcement.
Lion Nathan reported its half year figures today and if we can rely on wire reports from the press presentation Chief Executive Officer Rob Murray simply declined to comment on speculation the company may bid for Independent Distillers, which is New Zealand’s biggest maker of so-called pre-mixed spirit drinks (another popular term is ready to drink alcoholic mixes).
Independent Distillers has appointed UBS to seek a buyer for the company after its founder Michael Erceg died in a helicopter crash in November.
While Lion Nathan’s first half profit of $148.9m marginally beat market forecasts, it is probably the announcement that management plans to give back $380m to the company’s shareholders through a share buyback and special dividend that makes the stock one of the few stand outs on another rainy day on the local stock market.
The shares were up 1.4% to $8.31 last time we checked.
The capital management announcement most certainly will have come as a surprise to the likes of ABN Amro. With some market experts estimating the highest bid for Independent Distillers could run up as high as $1.1bn, surely anyone seriously considering the option would wait spending so much cash?
It’ll be interesting to see what the experts have to say in their post-results reflections. Other likely bidders for Independent Distillers are believed to be all the usual suspects, including Foster’s (FGL).
Lion Nathan is 46% owned by Kirin Brewery, Japan’s biggest beverage maker and recently mentioned as a potential take-over target for Warren Buffett’s Berkshire Hathaway.