By James Atkinson
Lion is set to acquire the remaining 64 per cent of Little World Beverages Limited, the ASX-listed brewer of Little Creatures and White Rabbit beers.
Little World Beverages (LWB) this morning announced that Lion intends to acquire all the shares in the company it does not already own under a Scheme of Arrangement that would give shareholders $5.30 for every LWB share held.
The Scheme consideration of $5.30 per LWB share represents a 39.8 per cent premium to $3.79, the closing price of LWB shares on Friday.
It implies an enterprise value for LWB of $381.6 million and a multiple of 20.3 x EBITDA for the year ended 31 December, 2011.
LWB directors – who hold about 35 per cent of the total current shares on issue – said in a statement that they intend to vote in favour of the proposal and will recommend that other shareholders do the same.
Chairman Ian Cochrane said the proposal "presents a low risk opportunity for the products and brands to be firmly established nationally and consider new markets internationally through the Lion network".
"In the unanimous view of the Board, the pricing under the Scheme represents a very attractive premium for shareholders, particularly in light of the fact that Lion already holds 36 per cent of the company," he said.
"Shareholders who invested in the initial public offering of Little World Beverages in November 2005 would have enjoyed a total shareholder return of approximately 543 per cent, compared to 19 per cent for the ASX200."
LWB said its expectation is that the WA-based company will, as part of Lion, continue to operate as a distinct and individual brand, whilst benefitting from Lion's scale, market presence and operational expertise.
LWB directors Nic Trimboli and Howard Cearns – who have recently set up their own spirits distribution business – said the deal gives LWB brands "the opportunity to achieve even higher levels of recognition and success that they deserve on the national and international stage".
Lion CEO Rob Murray said the company will use its scale distribution system to get the brands to more beer lovers, "while respecting the craft brewing ethos of the Little World Beverages brands, breweries and hospitality venues".
"Lion has a strong record of nurturing and preserving the entrepreneurism that has made boutique beer and wine brands like James Squire, Knappstein, Petaluma and St Hallett great, and will continue to invest in the Little World Beverages’ brands in the same manner," he said.