Marcus Blackmore backs Kirin’s $1.85bn takeover bid, saying it will help advance his father Maurice’s legacy

Marcus Blackmore has no doubt Kirin ‘will be a good custodian of the brand’ his father Maurice founded.

Marcus Blackmore has “no doubt” Kirin “will be a good custodian of the brand” his father Maurice founded as he sells his 18 per cent holding in the vitamins company to the Japanese brewing giant, reaping $335m.

Kirin has lobbed a $1.85bn takeover of Blackmores priced at $95 a share. The news sent Blackmores shares soaring more than 22.7 per cent to $94.26 on Thursday.

Still, it was less than $217.98 the company shares hit in late 2015 at the peak of the so-called Chinese “dining boom” before a tightening of the daigou or reseller market sent its stock into a downward spiral, with Mr Blackmore conceding the company had made “dramatic mistakes”.

Kirin will use Blackmores to diversify from beer and accelerate the expansion of its pharmaceutical and health sciences divisions, which currently account for about 25 per cent of its overall ­revenue.

The Australian’s DataRoom column flagged three weeks ago that Blackmores had attracted Japanese interest, with Suntory also understood to be keen. There has been a handful of private ­equity groups that have also shown some persistent interest.

Mr Blackmore has made no secret of the fact that he was happy to part with his 18 per cent holding. Meanwhile, the Blackmore Foundation owns another 3 per cent of the company.

He has publicly criticised the financial performance of the company and says he has not been welcome there for the past two years after he was embroiled in one of the most high-profile Australian boardroom battles.

“I’ve made it clear over the last 18 months that I would consider selling those shares, so plenty of Australian companies have had an opportunity (to buy them) and some have approached us, but it hasn’t delivered anything and Kirin did,” Mr Blackmore said.

“I’ve had the opportunity of spending a lot of time with Kirin and I don’t have any doubt that they would be a good custodian of the brand.”

Mr Blackmore said he planned to invest in projects to advance the professionalism of naturopathy following the sale of his stake.

Blackmores CEO Alastair Symington.

He has already donated $15m to two universities – Southern Cross University and Western Sydney University – to help fulfil his father’s dream.

“It’s all part of the legacy that my father left me with on his death bed,” Mr Blackmore said. “He said ‘son, the sad thing about my life is that I haven’t seen naturopathy as a true profession’, and so I’ve taken that up.

“I had my 78th birthday the other day and at some stage I’m going to meet my maker and hopefully the people I left behind will be able to distribute that money in an appropriate way.”

Kirin is understood to have ­offered Mr Blackmore an advisory role in the company.

Kirin’s takeover offer comes after two tense years between Blackmores directors and ­executives and Mr Blackmore, which culminated in former chair Anne Templeman-Jones resigning from the vitamins group in November last year.

Mr Blackmore said he had been banned from talking to directors and executives under the previous leadership.

Blackmores shares hit a record high of $217.98 in late 2015 amid a boom in exports to China. Since then, its shares have tumbled to $76.79 – before the Kirin deal.

“We’ve certainly made some dramatic mistakes in the last four years where our earnings per share has gone from more than $4, and then at the AGM last year the board announced a ‘solid year and increased earnings per share to $1.25’. Well, I accused the board of gilding the lily,” Mr Blackmore said.

“When people ask me why would I support a company like Kirin, that’s a beer company, I say, well, they’re trying to develop their health sciences division. They’ve already got the No.1 immunity product in Japan, they’ve got partial interest in other vitamin companies … so they’re not blind to the whole exercise and opportunity.”

While known primarily as a brewer – including being the owner or Lion’s range of beers in Australia – about a quarter of Kirin’s revenue comes from its pharmaceutical and health sciences divisions.

Kirin president and chief executive Yoshinori Isozaki said: “Blackmores presents an exciting opportunity to transform the scale and reach of our health science domain.

“Kirin Group is working to create social value and economic value by solving social issues through our business activities, and we have been transforming our business from a brewing business to the business model creating value across food and beverages and pharmaceuticals domains, based on the concept of ‘CSV’ (creating shared value).”

Kirin’s health science boss, Takeshi Minakata, said the company would continue to invest in Blackmores.

“We also recognise the strength and capability of the Blackmores team and will work with them to build on the proud legacy of the Blackmores business and to realise its full potential, while maintaining its headquarters and manufacturing operations in Australia,” he said.

The bid remains subject to Foreign Investment Board Approval. Moody’s Japan analyst Ryohei Nishio said Kirin’s acquisition of Blackmores would “enhance its business diversification, strengthening its brand and product portfolio in the health science category”.

“The transaction is consistent with Kirin’s long-term strategy of expanding its health science business,” Mr Nishio said.

Blackmores chief executive Alastair Symington described the deal as an “important day”.

“The Kirin proposal recognises the strong leadership position that Blackmores, through its brands and people, has established in the natural health sector across the Asia-Pacific region over our long history,” Mr Symington said.

“Importantly it also confirms the significant opportunity that lies ahead for our employees and other key stakeholders of Blackmores as both companies come together to combine their focus on growing Kirin’s health science business across the world.”