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Tasmanian mouse that roared still wants Lion's shares

By Michele Simpson

Friday 31st March 2000

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The small Tasmanian brewery gunning to take over Lion Nathan is proving its financial might by bidding for large UK company Bass Brewing.

J Boag & Son's move to pick up the Bass Brewing assets, valued at £2 million, could convince Lion Nathan's 45% shareholder, Kirin, to come to the negotiating table, Boag chairman and chief executive Philip Adkins said.

Kirin last month told J Boag & Son it was not interested in selling its Lion stake so the Tasmanian company could buy out the $2 billion listed New Zealand brewer.

"With the share price at $A2.80 we pointed out to Kirin that it had a 40% loss on its initial investment," Mr Adkins said.

He blames Lion's heavy price discounting in both Australia and New Zealand for shares dropping their value in both markets and dubs Kirin a "publicly listed charity."

Mr Adkins has appointed Westdeutsche as financial advisers to J Boag & Son.

He said the offer of £1.5-2 million for Bass Brewing assets had ensured a place for the company in the next round of negotiations.

Worldwide brewing companies such as Heineken, Carlsberg and South African Breweries were also bidding for Bass.

Mr Adkins, a former investment banker who owns a third of J Boag & Son, said Boag's financial partner Westdeutsche proved the $A51 million company was not just blowing hot air when it made its intentions known to take over Lion Nathan last year.

Its original bid to own Lion Nathan failed in 1998 when Douglas Myers sold his shareholding to Kirin.

"It really troubles me that Lion is still discounting both here and in New Zealand when it suggested it is not.

It is giving volume discounts at the end of every month to meet sale targets," Mr Adkins said.

"Kirin now has to take us seriously given our situation in the Australian market. Our financial resources show we can engage in a transaction many times our own size."

Boag shares went up 3c on the Australian Stock Exchange to 93c following the Bass Brewing announcement.

Lion Nathan shares have dropped steadily over the past four months and was valued this week at $3.41. Over the past year it has peaked at more than $4.80.

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