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Daily ShareChat: Lion Nathan | Kirin

By Jenny Ruth

Friday 8th May 2009

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 Jenny Ruth

Japan-based Kirin's effective $A12.22 ($NZ15.66) per share takeover offer appears to be a good price, offering a healthy 47.1% premium to the $A8.31 share price on April 22 ahead of the bid, says Aegis Equities Research analyst Ben Brownette.

It is also a 52.9% premium to volume weighted average share price of $7.99 in the month before that. Kirin is offering $A11.50 per share plus a 72 cent fully franked cash payment for the 53.9% it doesn't already own, to be implemented through a scheme of arrangement which requires a shareholder vote.

"The key issues surrounding Lion Nathan's beer operations are the increasingly competitive environment in New Zealand and weak volume growth in Australia," Brownette says.

"While we are bearish on the Australian wine industry, and are concerned about the impact of a sturated beverages market on long-term margins, Lion Nathan's 2008 result has demonstrated the uplift from shifting into premium products," he says.

Lion Nathan reported a 4.2% rise in net profit to $A278.3 million for the twelve months ended September 2008 and last week raised its guidance for this year to between $A305 million and $A315 million. First-half net profit rose 6.9% to $A176 million.


BROKER CALL:  Aegis Equities Research rates NZX: LNN as NEUTRAL.



DISCLAIMER: To the extent that any of the content above constitutes advice, it is general advice that has been prepared without reference to investor’s objectives, financial situation or needs. Before acting on any advice, investors should consider the appropriateness of the advice and IRG recommend that investors should obtain appropriate financial, legal and taxation advice before making any financial investment decision. The report is based on information compiled from public information and private research. IRG have completed the report on a best endeavours basis and do not accept any liability of loss or damage. IRG suggest that clients use this as part of a decision making process and check key data before making any investment decisions.
Employees may have an interest in the securities discussed in this report.

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