E-Malt.com News article: Australia: Cooper’s shareholders plan preventing Lion Nathan from buying Cooper’s shares

The shareholders of Coopers Brewery are racing through a vote to take away Lion Nathan's right to buy shares in Coopers in a bid to make it takeover proof. Yet, with one big shareholder willing to sell and corporate-governance issues at the Adelaide brewer causing concern, the vote could fail, The Advertiser News communicated on September 27.

Shareholders wanting to strike out Lion Nathan from the share-buying process need a 75 % majority at an extraordinary general meeting on October 20. The numbers look discouraging for Coopers.

The Supreme Court battle over a Cooper family member's will being waged by Adelaide socialite Mary Phyliss Henderson has led to an 8.5 %, A$30 million stake in Coopers now being put under the control of administrator John Hart, of Ferrier Hodgson. Mrs Henderson indicated willingness to sell but Mr Hart said on September26 he understood his actions would need to be backed by a court order.

Prince Alfred College owns a further A$18.2 million or 5.2 % stake. Shareholders who sold shares in a 2003 buyback, and who may consider themselves to have been dudded by the A$45.01 valuation arrived at by auditor KPMG, hold a further 2 % according to the shareholding list lodged at the time.

Since Lion's takeover bid was announced, a transfer notice for 6000 shares has been lodged by one shareholder. As well, Lion Nathan says it has been approached by several shareholders asking how to lodge their interest in selling.

Some shareholders, not close to the inner sanctum of the Cooper family, could be forgiven for feeling left out following an admission by managing director Tim Cooper last week. He said that, rather than all shareholders having equal rights, Cooper-family members were given priority treatment when it came to buying shares. The extraordinary general meeting will vote on a motion to remove Lion Nathan's third-tier rights to buy shares.

If the door is shut on Lion Nathan, the ability of Coopers' shareholders' to find a liquid market for their shares will be vastly diminished, believes the Advertiser. Coopers has sent a letter to shareholders inviting them to join a register to buy shares in an effort to have them mop up any that may come on the market, before Lion can get at them.

However, former shareholders are asking why this was never done before when shares were placed on the market. A former shareholder, contacted by The Advertiser , said that in about 20 years as a shareholder he was only once advised that Coopers shares were for sale.

KPMG's valuation for the 2003 buyback stated that about 5 % of Coopers' share capital - much greater than the IEL stake - had been traded in the previous 3 1/2 years.

The shareholder, wondered why other shareholders were not given a chance to buy in at the then price of A$16.27 per share. "It is interesting that the directors weren't selling (in 2003) if it was such good value at A$45.01," he said.

An analysis of annual returns shows some of the directors have been increasing their stake over the past few years. Tim Cooper increased his stake from 7000 shares in 1998 to 12,916 in 2004, while Bill Cooper's stake rose from 154,538 to 169,355 over the same period.

Adelaide-based listed investment company Argo Investments sold its 10,000-share stake in 2003 for A$450,100. The reaction of Argo Management to the A$2.15 million disparity with what it could have realised now - in 2005 - will no doubt be of interest to shareholders at Argo's annual meeting on October 24.


28 September, 2005