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Little Creatures to go to Lion

June 18, 2012
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 Media Release

Little World Beverages Board Recommends Lion Offer to Acquire 100% of Little World Beverages by Scheme of Arrangement

Monday  18  June 2012: Lion confirmed today that it has reached an agreement with the Board of Little World Beverages to acquire the  shares in  Little  World  Beverages it  does  not  already  own  by  way  of  a  Scheme  of Arrangement (“Scheme”). Under the Scheme, Lion proposes to offer Little World Beverages shareholders $5.30 per share in cash (“the Offer”) subject to the successful implementation of the Scheme.

The  cash consideration of $5.30  per share will be  reduced  by  the  amount  of  any  dividend  declared  by  Little  World Beverages prior to the Scheme becoming effective (the “Offer”).

This  Offer  provides  a  highly  attractive  outcome  to Little  World  Beverages  shareholders.  It  values Little  World Beverages at a total enterprise value of $381.6 million and represents:

  • a  multiple  of 23.1 times Little  World  Beverages’ FY11  EBITDA  (Little World Beverages’ last  published annual accounts)  and 20.3 times Little World Beverages’ EBITDA for the 12 months to 31 December, which compares favourably with precedent transactions and sector trading benchmarks;
  • a 39.8% premium to $3.79 per share, Little World Beverages’ last ASX closing price on 15 June 2012;
  • a 45.0% premium to $3.65 per share, Little World Beverages’ one month volume weighted average ASX closing share price (“VWAP”) up to and including 15 June 2012;
  • a 44.9% premium to $3.66 per share, Little World Beverages’ three month (“VWAP”) up to and including 15 June 2012; and
  • a 49.6%  premium  to  $3.54 per  share, Little World Beverages’ six month (“VWAP”) up to and including 15 June 2012.

Rob  Murray,  Chief  Executive  Officer  of  Lion,  said:  “This is a very compelling offer for Little  World  Beverages shareholders and we are pleased the Little World Beverages Board has agreed to recommend it to its shareholders.

“Lion has a long history of supporting the Little World Beverages business and we believe there is now a fantastic opportunity through Lion’s scale distribution system to get these great brands to more beer lovers, while respecting the craft brewing ethos of the Little World Beverages brands, breweries and hospitality venues.

“Lion has a strong record of nurturing  and  preserving  the  entrepreneurism that  has made  boutique  beer and  wine brands  like  James  Squire, Knappstein, Petaluma  and St  Hallett  great, and will continue  to  invest  in  the Little  World Beverages’ brands in the same manner.

“Lion holds Little World Beverages’ founders and management team in the highest regard. They deserve enormous respect for building Little Creatures into one of Australia’s leading craft beer brands,” said Rob.

The Independent Directors of Little World Beverages have confirmed that they intend to unanimously recommend that Little World Beverages’ non-Lion shareholders vote in favour of the Scheme and each of the LWB Directors intends to vote in favour of the Scheme in relation to the LWB shares held or controlled by them (which amount to approximately 35% of the total current LWB shares on issue), in the absence of a superior proposal and subject to confirmation by an independent expert that the Scheme is in the best interests of shareholders.

Conditions of Lion’s Offer
The implementation of the Scheme is subject to a limited number of customary conditions, including:

  • issue of ASIC & ASX consents, waivers, modifications and approvals necessary to implement the Scheme;
  • approval from the Foreign Investment Review Board;
  • approval of the Scheme by Little World Beverages shareholders and the Court;
  • an independent expert (appointed by the Independent Directors of Little World Beverages) confirming that the Scheme is in the best interests of Little World Beverages’ shareholders; and
  • other customary conditions such as no material adverse change in the Little World Beverages business.

Next Steps
A  Scheme Booklet  with  full  details  of  the Offer,  including an independent expert’s report, is expected to be dispatched to Little World Beverages shareholders in September 2012.  The scheme meeting to approve the Scheme is expected to be held in October 2012.

Advisers
Greenhill Caliburn is acting as financial adviser to Lion and King & Wood Mallesons is acting as its legal adviser.

About Little World Beverages

Little  World  Beverages  is  an  ASX  listed  craft  brewing  company  based  in  Fremantle,  Western  Australia.  Lion  was  a foundation  shareholder  in  the Little World  Beverages business  in  2000  with  a  20%  interest  and,  at  the  time  of  the initial public offering and ASX listing in 2005, had achieved an interest of 35%. Lion now holds 36.3%.

Little World Beverages’ key brands are Little Creatures, White Rabbit and Pipsqueak Cider. Little World Beverages operates one brewery in Fremantle, one in Healseville and has another brewery under construction in Geelong. It also operates three hospitality venues in Fremantle, Healesville and Fitzroy.

About Lion

Lion brings together great household brand names including Tooheys, Dairy Farmers, XXXX, PURA, Hahn, Berri, Speight’s, King Island Dairy, Boag’s, Yoplait, Wither Hills and COON. Lion has a strong record in nurturing smaller premium brands without compromising entrepreneurialism or quality. Such brands include James Squire, Knappstein, Petaluma and St Hallett.

Lion believes business success comes from investing in its people and brands and by constructively engaging its stakeholders. Lion employs close to 7,500 people across Australia and New Zealand and delivers revenues in excess of AU$5 billion. In addition to direct employment, Lion makes a significant contribution to the Australian and New Zealand economies – it is one of the region’s largest purchasers of agricultural goods and an integral component of the retail, hospitality and tourism industries.

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