E-Malt.com News article: Australia: Boutique brewer Little World Beverages saw its market value soared to $94 million which renewed speculations about a buyout by major co-owner Lion Nathan

The head of boutique brewer Little World Beverages, the maker of Little Creatures beer, puts the company’s recent share price run down to hard work, but market speculation suggests otherwise, The West Australian posted October 19.

Since it pressed the button on a $30 million expansion of its Fremantle brewing operations on September 29, the company has seen its stock jump from $1.22 to October 19 fresh record high of $1.60, up 5 cents, for a gain of 17 per cent.

The run has propelled Little World’s market value to $94 million from $72.4 million and sparked renewed speculation about a buyout, most likely by its major shareholder, Lion Nathan.

The trans-Tasman brewer has 34 per cent of Little World and could move to tighten its grip on the back of strengthening demand for premium beer and the growing popularity of boutique brewers.

But outsiders suggest others would also be interested if an opportunity arose. Aequs Securities’ head of institutional trading, Ric Klusman, said it was possible Coca-Cola Amatil could be looking over the smaller boutique brewers.

“I would have thought that was a possibility . . . Little World is a reasonable-sized company,” he said. “Coca-Cola has been buying water companies and they made comments recently that they were looking to expand into the beer market.”

Little World’s flying share price has added millions to the value of the stock held by its founders.

Howard Cearns, restaurateur Nic Trimboli, property developer Adrian Fini and lawyer David Martin are sitting on combined paper gains of $13 million since the stock listed at $1 last November. Mr Cearns and Mr Trimboli also hold three million options, exercisable at $1, though not until August 2010.

Little World chief executive Jason Marinko said there was no reason behind the share price climb aside from the company delivering what it had promised in its prospectus.

“It’s just business as usual for us, we are just head down and butt up,” Mr Marinko said.

The company recently posted a solid net profit for 2005-06 of $2.73 million, up 3.8 per cent on its prospectus forecast. “We were happy with those (results) and they met the expectations of the market,” Mr Marinko said.

The company’s new brewery will be built next to the existing Little Creatures brewery in Fremantle. Some final conditions still need to be cleared before construction begins.

The WA boutique brewing industry has come into focus of late with a number of new entrants seeking public cash.

Empire Beer has just launched a prospectus for $10 million to develop brew-pubs at Fremantle and Leighton Beach, while Oz Brewing is in the process of raising $1.5 million in an initial public offering to develop a brewery, also in Fremantle.


20 October, 2006