Fins Case - Coopers Brewery
Autor: goude2017 • June 29, 2018 • 803 Words (4 Pages) • 549 Views
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3. What are the potential strategies that Lion Nathan could implement after the deal to maximize synergies and control benefits? Do they justify the very high takeover premium offered by Lion Nation?
If Lion Nathan could form joint venture with Cooper, Lion Nathan could use Coopers’ new brewery facilities and close its own. It save amount of money on equipment cost and fix cost. Lion Nathan either purchase 50% shares of Cooper or undertake whole company so that Lion Nathan have strong control benefits which is able to make any important management and operation decision. Consequently, Coopers will lose its ownership and control. Before this deal, Lion Nathan is already the largest brewery in South Australia and have a fewer employees. If Lion Nathan could implement this deal, it might become monopoly in beer industry. However, Coopers doesn’t not justify the high premium offer; instead they rejected this deal by not considering the money value.
4. Why did Coopers resist the offer and how? Can its actions be justified given the very high takeover premium?
Lion Nathan acquired SA brewing in order to achieve the national beer coverage. Coopers bought back the SA brewing shares in Coopers at $7.23 per share; Lion Nathan got the third tier pre-emptive rights. Japanese brewer became the fourth directors by purchasing 45% share. Because the Lion Nathan changed the control, they are asked to be remove the right. Lion Nathan is the first one to break the contract and negative impact Coopers’ value. Now Lion Nathan lost the market share and wanted to merge by providing its national distribution to Cooper. Cooper required shareholders’ meeting to vote if Lion Nathan should be removed. Followed the Supreme Court decision, the offer from Lion Nathan is rejected. The joint venture case failed is not about takeover premium. However, Cooper rejected joint venture because Cooper want to be diversified, independence and keep local ownership. Its defensive strategy is able to protect Cooper’s equity.
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