IT would be easy to think of the takeover of Little World Beverages as a rerun of Matilda Bay Brewing Co more than 20 years ago.
After all, it involves the same key people building a boutique Fremantle-based brewer into a national player and then selling out to the big boys of brewing.
One of the key differences this time is scale.
This week’s bid by Japanese-owned drinks giant Lion values Little World at more than $380 million, a staggering return for the founders and directors who represent 35 per cent of that equity, or $133 million, an increase of more than five-fold since the company listed in 2005.
By comparison, the sale of Matilda Bay in 1990 was like a pony sitting on the bar next to the Little World pint.
Matilda Bay sold for about $23 million to Carlton & United Breweries, according to reports at the time. The Reserve Bank of Australia’s inflation calculator suggests that would be about $40 million today.
The $5.30 per share offer by Lion means a big windfall for Little World founder and director Adrian Fini, whose stake is worth nearly $58 million, well above the $5 million valuation at listing.
Other founders Howard Cearns and Nic Trimboli, both linked to Matilda Bay, stand to reap about $21 million each from the deal. However, both could have done much better. In October, they disposed of a combined 3.6 million shares at $3.30 each. Those shares would be worth an extra $7.2 million under the terms of the offer.
Similarly, another director there from the beginning, David Martin, sold down nearly 200,000 shares this year, according to WA Business News and ASX records.
His 4.2 million shares stake this week was worth more than $22 million.
Matilda Bay founder Phil Sexton, who was also a key player in Little World, has 3 million options exercisable at $1.63.
Back in 1990, CUB’s purchase of Matilda Bay, which had only been listed for two years, was its first proper foray into Western Australia at a time when Australia’s brewing market was largely divided up by state.
Victorian-based CUB, which later became Foster’s, was entering the space controlled by Swan Brewery, then owned by Bond Corporation. Bond also owned XXXX in Queensland and was involved in a tough fight against another listed boutique brewer, Powers Brewing, and the Tooheys business in NSW, which was later grabbed by New Zealand-based Lion.
The landscape has changed this time around.
Lion and CUB now dominate the national brewing scene; and foreign groups control both.
A host of listed boutique WA brewers has failed to emulate Little World’s success during the past decade – Gage Roads, Empire Beer Group and Oz Brewing have all struggled by comparison.
The acquisition is also a big win for local investment bank Gresham, whose WA head Justin Mannolini has been Little World’s adviser to the deal, a scheme of arrangement under which Lion buys out the founders and other shareholders who represent about 64 per cent of Little World’s equity.
Little World’s lawyers were from Freehills, led by David Gray and James Sippe, while Lion used King & Wood Mallesons as lawyers and Greenhill Caliburn as advisers.
