‘Defensive’ bid for Lion

Press, 4 July 1985, Page 28

‘Defensive’ bid for Lion

PA Wellington Tarragon Investments, Ltd, the company owned by two Lion Breweries directors at present buying 10 per cent of the brewer, said last evening that the move was a defensive one, designed to ward off Australian interests. Following rumours last month in Australia, Tarragon had acted to ensure that control of Lion could not be challenged, Lion’s managing director and a director of Tarragon, Mr Douglas Myers said in a statement. “With the shares now acquired, and the shares of the other major shareholders, this objective has been achieved,” the statement said. A spokesman for the sharebroker acting for Tarragon, Jarden and Co, said that more than five million of the 7,600,000 shares sought had been acquired. He said that Auckland brokers, Morrow and Benjamin, had competed briefly

for Lion shares at 2c above the 370 c offer price. At the start of the bid Tarragon offered 350 c, but an escalation clause means that those who have sold, through Jarden, below 370 c will he recompensed. Lion directors, after their board meeting yesterday said: “Board members had been informed of the bid by Tarragon Investments, Ltd, and were satisfied as to the objectives of the bidders. “Having regard to the market price immediately before the offer, the recently announced results of the company and the quantity of shares sought, the board considers the premium offered on the market price to be fair and reasonable.” At 370 c the offer price represented a price-earning multiple of more than 10, based on Lion’s recently announced trading profit for the 1985 year, the statement said.