ACCC likely to give Lion the nod: Citibank

Citibank has advised in an equities bulletin on Monday that it believes Lion’s attempt to purchase the remaining 64 per cent of Little World Beverages will be approved by the ACCC.

The decision is “likely in our view” considering that the Australian Competition & Consumer Commission (ACCC) granted approval to Lion’s attempted hostile takeover of Coopers in 2005, based on Coopers’ struggling share value and Lion’s use of independent wholesaler networks.

The LWB offer represents a substantial premium for shareholders of around 45 per cent, and reflects Lion’s position to synergise costs and profits in its portfolio.

Lion has cited the move as an opportunity for LWB, and great news for consumers and appreciators of Little Creatures brands.

“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 CEO, Rob Murray.

LWB currently enjoys around 0.6 per cent of the Australian beer market, producing 10-11 million litres per year.

The acquisition would further strengthen the Lion craft and premium beer portfolio, which hold its greatest opportunities for continued growth in the beer category.

Source: The Shout, 20 June 2012