In its maiden pitch to potential buyers – emblazoned with Deutsche Bank branding – Lion pitched the portfolio as «Australia’s most iconic dairy and beverage brands with inherent nutritional value», according to a two page teaser document sent to potential buyers last Wednesday.
The flyer was typically light on financial detail, but had plenty of juicy details on Lion’s brands and their respective market shares.
Tyrekickers were told Lion’s Dare and Farmers Union were No.1 in milk-based beverages with 49 per cent of the market, while Lion also had 31 per cent of Australia’s specialty cheese market via its South Cape, King Island Dairy and Tasmanian Heritage brands.
The flyer said Lion’s yoghurt brand Yoplait also had 27 per cent of its market.
The teaser document was designed to formally launch the $1.5 billion-odd sale, which came after a rapid-fire strategic review. The teaser confirmed Deutsche Bank would run a two-stage auction, and added that Greenhill & Co had been hired as independent adviser.
It is understood tyrekickers have separately been told to expect formal and much more detailed sale documents, including the information memorandum, by the end of this month. Sources said Lion’s bankers had already started signing parties to non-disclosure agreements, paving the way for the release of confidential information including detailed earnings information and financial forecasts.
Lion’s bankers should have a pretty good idea who will be interested by now.
Australian dairy is a small world, and it is pretty obvious which players are on the lookout to beef up their portfolios and which ones, like Lion, are on the way out.
Canada’s Saputo – which bought Warrnambool Cheese & Butter Factory in 2014 and Murray Goulburn last year – is taking an early look and is expected to be one of the lead contenders when bids hit Lion’s camp in coming months. Street Talk can reveal Saputo has hired Moelis Australia for financial advice, re-linking with the firm that has helped build its local portfolio including Warrnambool.
Coca-Cola Amatil is also lining up for the auction. It’s believed the Australian bottler is expected to team up with its American parent – global drinks giant The Coca-Cola Company – in assessing the potential acquisition. The Coca-Cola entities did the same when they agreed to buy kombucha maker Organic & Raw Trading Co, which has the MOJO brand, in September. On that occasion, TCCC’s Australian franchisee Coca-Cola Amatil was expected to take over the company’s local sales and distribution while the US parent owns the actual brand.