Australia’s third-largest beer group Coopers Brewery has valued itself at around $500 million as it prepares to undertake another share buyback, with internal documents showing shares in the company are worth $357 each.
This puts the value of the business $80 million higher than was offered by brewing giant Lion in a bitter takeover battle that ended in 2005 when family shareholders voted against selling out. That offer of $310 per share included a handsome takeover premium and valued Coopers at the time at $420 million.
Coopers managing director Tim Cooper told Fairfax Media on Wednesday there had been no fresh buyout advances made by any outside parties in the past couple of years. The 143 shareholders, most of them descendants of the founders, recognised the value of the company remaining independent.
“Certainly our independent status is very important from a marketing point of view,’’ he said.
He confirmed that Coopers shares had been valued at $357 each in a dividend re-investment plan and share purchase plan undertaken by the brewer in June.
Coopers is an unlisted public company and Dr Cooper said subject to board approval there would be another share buyback undertaken in February and March, 2015.
“It’s really there to offer people a liquidity opportunity,’’ he said.
Coopers undertook a share buyback in February and March, and Dr Cooper said it would remain a regular feature of Cooper's capital management approach, subject to market conditions and board approval.
“We had a couple of years after the GFC where we didn’t do them,’’ he said.
Dr Cooper, who said Coopers had generated beer sales volume growth of 8.1 per cent in the year through June, said capital investment spending would be around $9 million in 2014-15.
New fermenters would be installed at the company’s plant in the industrial suburb of Regency Park in Adelaide. This followed $20 million of investment in 2013-14, the bulk of it on a second bottling line using specialist equipment from Germany.
He said there was no requirement for any outside capital injection and the company, which is 150 years old, was managed conservatively.
“It is pretty conservatively geared,’’ he said.
He said share buybacks over the past few years had resulted in the total shares on issue being trimmed back to about 1.15 million, compared with around 1.4 million when Lion launched its bid. The Lion bid was originally pitched at $260 per share, and later increased to $310 per share.
Coopers has a national market share of 4.5 per cent of the beer market. Dr Cooper said the defence of the Lion takeover had cost the company more than $8 million and the huge public interest in that protracted battle and the fierce fight the family put up would have contributed to the reluctance of any future predators to try again.
Lion’s beer operations, which make XXXX, Tooheys and West End, is now part of the broader Lion dairy, beer and juice conglomerate after the company was taken over itself by Japan’s Kirin Corporation in 2009.
Coopers became the last big Australian-owned beer group in 2011 after Carlton & United Breweries was bought out by global conglomerate SABMiller in a 2011 takeover of Foster’s Group.
The attempted takeover of Coopers by Lion triggered a dramatic rethink of capital management by Coopers, which resulted in a substantial lift in the dividend payout ratio to shareholders. In 2012-13 dividends paid to shareholders totalled $14.7 million, almost half of total net profit of $30.8 million.
The third-largest shareholder in Coopers is a trust that directs its dividends earned each year to psychological research overseen by a Zurich tertiary institution with a large focus on the principles of the famous Swiss psychoanalyst, Carl Jung. This directive comes from a will made in 1943 by Donald C Cooper, which is still followed by Cooper trustees.
