COOPERS BREWERY, the South Australia-based independent beer maker, has successfully resisted a hostile takeover bid from Lion Nathan Australia, the multinational drinks company with a portfolio of beer brands. Most recently, the High Court of Australia refused an application by Lion Nathan for special leave to appeal against Coopers’ victories in the Supreme Court of South Australia.
Coopers, Australia’s most prestigious family-owned brewery, had initiated court proceedings to prevent Lion Nathan from owning shares in the company. Kirin Brewery had bought a 45 per cent stake in Lion Nathan in 1998. Coopers argued that constituted a change in control, and Lion Nathan should no longer be permitted to buy shares in Coopers, as it has been under Coopers’ constitution for the last 10 years.
The brewery was determined to keep its independence, which constitutes a significant marketing advantage among dedicated customers. The tussle was characterised as a ‘David and Goliath’ battle.
Coopers was represented by Piper Alderman, which also has origins in Adelaide. The firm drew up the original Coopers corporate constitution in the 1920s, and has acted for the brewery since then. Partner Miles Crawley headed the team of solicitors and Dick Whitington acted as counsel. Malleson Stephen Jaques acted for Lion Nathan, which also took an action represented by Minter Ellison. The face-down between these giants and the Piper Alderman team, who fielded far fewer lawyers, constituted its own David and Goliath struggle, said Crawley.
Lion Nathan undertook actions in several Australian jurisdictions at once, stretching Piper Alderman resources, Crawley said. “It was difficult to keep on top of all of them, plus attend the takeovers panel in Sydney, at once.”
Although the client was in a defensive position, Crawley said the team’s strategy was to be as proactive as possible. “Normally the other side controls the time frames and how quick it moves. But we needed it to be decided as fast as possible with least money spent. We ensured the timelines were tight and that all complied with them, and constantly challenged the other side to get things done quickly.” The team also actively challenged Lion Nathan on adequacy of discovery and its strategy of funding nominees to bring actions in opposing jurisdictions.
Lion Nathan’s offer, at $260 per share, was a significant premium to the $45.01 per share shareholders were offered back in 2003 in a buyback scheme. However, Coopers’ small shareholder community of 119 individuals, in large part related to the Cooper family, voted 93.42 per cent in favour of removing Lion Nathan’s privilege to own shares while it remained a competitor.
“Coopers was such a great client,” said Crawley. “The people were genuine, appreciative of what we do, and even though they were facing a hostile takeover while minding their own business, incredibly wholehearted and full of confidence in us. They also make damn fine beer.”