Lion ‘plea’

Press, 18 March 1988, Page 12

Lion ‘plea’

Malayan Breweries, of Singapore, has renewed its plea for shareholders of Lion Corporation and L. D. Nathan and company to reconsider the terms of the proposed merger between the companies.

Malayan Breweries holds a 22 per cent stake in Lion and on Wednesday lodged an action in the High Court in ■ Auckland, challenging the validity of an extraordinary ! meeting of Lion shareholders on March 8, which approved the merger. Joint plaintiffs in the appli- ( cation ! were Fraser and ■ Neave, and Messrs Michael Fam and John Cronin, shareholders and Lion directors. Mr Fam is the chairman of Fraser and Neave and a director of Malayan Breweries. Under the terms of the merger, Fay Richwhite and Company, which controlled 35 per cent of Nathan’s, was offered more for its holding than (minority shareholders. But the group general manager (corporate services) of Malayan Breweries, Mr lan Mac Lean, said the minority shareholders had been given insufficient information to make] a decision. , Once they had that information then it was -up to them | to decide on,the merger, but until they were fully informed on the terms, then they 'should not be asked to make that decision. | "We have never opposed

the principle of the merger, but we believe that the pre nium being paid to Fay, Riciwhite for its 35 per cent hole ing is : not in the best interests of either Lion or Nathan’s shareholders. “We are; trying to protect’ our investment in Lion, and the investment of every other minority shareholder, from being eroded by an enormous pay-out to Fay Richwhite which will leave Lion an impoverished company,” he said. | - The action now before the High Courtj sought to have the entire extraordinary meeting declared invalid and all acceptances I returned so that shareholders , were able to consider the terms of the merger in Ithe full knowledge of all the (relevant facts. “Our calculations indicate that Lion still requires acceptances from 5 per cent of the shareholders to comply with the Stock I Exchange requirements.” | ; Those uncommitted shareholders needed to think carefully about the proposal before they completed their acceptances. f( Mr Mac Lean said . Malayan Breweries was still undecided about its investment in Lion. If the merger went ahead its shareholding would be diluted from 22 per cent to about 12 per cent. At that stage there ' were three options — sell, let the status quo remain, or buy shares in the merged company. I