Shares in health supplements company Blackmores
(ASX:BKL) surged 22% on Thursday after a $1.9 billion bid at $95 per share by Japanese brewer Kirin, owner of the Lion beer business.
They ended the trading session at $94.26 a share, up nearly 23% on the day.
Major shareholder Marcus Blackmore – the son of founder Maurice Blackmore – has agreed to sell his 18% stake and his influence among some small long-standing shareholders
Improves the likelihood of the bid getting over the line.
Mr Blackmore, who would walk away with $334 million if the bid does go through, has made no secret of the fact that he believes the group’s current management has made too many excuses for what he sees as its recent poor performance.
Blackmores shares are down 34.7% over the past five years and despite outlining a global expansion strategy, the group has been hit by the impacts of the pandemic and the loss of international shoppers from China over the past few years.
Daigou shoppers have underpinned the group’s domestic vitamins sales and were largely lost during the pandemic’s lockdowns.
Sales have rebounded and the group saw a rise in half-year profits for the first six months of this year.
However, costs continue to rise and Blackmores has had to put through price increases for products in all its major markets.
That won’t change with new ownership.
Kirin’s bid comes as it expands into healthcare in the face of shrinking beer sales in its Japan (and Australia) and increasing regulation of alcohol.
“The acquisition of Blackmores is highly complementary to our existing Health Science business,” it said on Thursday.
It also owns healthcare businesses and in 2019 started a partnership with Japanese skincare products and dietary supplements firm Fancl.
Kirin has previously said it aims to generate ¥500bn ($US3.7 billion) in sales a year from its health business by the end of the decade.
