Petaluma parent company faces takeover from Kirin

Japan’s Kirin Holdings is set to add nine top new world wineries to its portfolio if an AUS$6.5bn bid for Lion Nathan succeeds.

Lion Nathan’s independent directors on Monday recommended that shareholders accept Kirin’s Aus$12.22 a share offer.

The price is nearly 50% higher than Lion Nathan’s closing price of Aus$8.31 last Wednesday, when a halt was placed on trading on the Australian Stock Exchange.

‘It is a compelling offer at a significant premium to Lion Nathan’s share price,’ said Lion Nathan chairman, Geoff Ricketts.

The bid is for the 54% of the company that Kirin does not already own.

Lion Nathan is Australia’s second-largest alcoholic beverages company behind rival Foster’s. It owns seven wineries in Australia: Petaluma, St Hallett, Knappstein, Mitchelton, Stonier, Tatachilla and Smithbrook. It also owns Wither Hills in Marlborough, New Zealand and Argyle in Oregon, USA.

It has a substantial distribution company in Australia, Fine Wine Partners, another in the US and a long-term distribution partnership with Bibendum in the UK.

Wine makes up 11% of Lion Nathan’s total assets and in 2007-08 it produced 1.5m cases.

Kirin’s existing wine holdings include Mercian, in Japan, Markham Vineyards in the Napa Valley and Chateau Reysson in Bordeaux.

Written by Chris Snow in Adelaide