Australia’s Blackmores gets A$1.88 billion offer from Japan’s Kirin

JAPANESE beer maker Kirin Holdings will acquire Blackmores for A$1.88 billion (S$1.66 billion), the companies said on Thursday (Apr 27), leading the Australian natural health firm’s shares to gain the most in more than seven years.

Kirin has offered A$95 cash per share, a 23.7 per cent premium to the stock’s last close, and has already entered a scheme implementation deed with Blackmores.

The board of Blackmores also unanimously recommended shareholders support the deal, with top shareholder and former chairman Marcus Blackmore having agreed to vote his shares in favour.

Blackmore, son of the company’s founder and 19 per cent shareholder, told Reuters he had been looking to exit for 18 months since he developed what he called an “antagonistic” relationship with its board.

“Kirin ... have a strong presence in Australia already, they take a long-term view about things, and they genuinely believe they can improve on how Blackmores is run, and I support that too,” he said by phone.

“When you’ve spent 57 years at a business, you don’t want to see the business suffer, and you want to see the business successful. I have no doubt in my mind that Kirin will deliver on that promise to me.”

The deal presents an exit for a one-time market darling that has been struggling to recover sales and engaged in public disputes after sales to China via informal “daigou” shoppers stopped under Covid-19 restrictions in 2020.

Before the Kirin deal, Blackmores shares were trading at one-third of their value in 2016, at the height of the daigou craze, in which Chinese consumers bought goods abroad and carried them home.

The Australian firm also expects to declare a special dividend of A$3.34 per share if the deal goes through, to allow shareholders to benefit from franking credits, in which case Kirin will reduce the per-share payout by that amount.

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Franking credits, in Australian law, are a tool to prevent double taxation.

Blackmores’ shares rose as much as 22.4 per cent to A$94, their highest since December 2021.

Kirin’s shares fell as much as 3 per cent to 2,158 yen, their worst intraday loss since Feb 15. REUTERS