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REJECT the Lion Nathan Offer

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					  This is an important document and requires your immediate attention. If you are in
          any doubt as to what you should do, consult your professional adviser

Target’s Statement for Coopers Brewery Limited ACN 007 871 409




                      Australian made. Australian owned.




      REJECT the Lion
       Nathan Offer
Financial Adviser                                         Legal Advisers
IMPORTANT NOTICES
Nature of this document
This is a Target’s Statement dated 15 November 2005 issued by Coopers Brewery Limited under part 6.5 of
chapter 6 of the Corporations Act in response to the Bidder’s Statement.

ASIC Disclaimer
A copy of this Target’s Statement has been lodged with ASIC. Neither ASIC nor any of its officers take any
responsibility for the contents of this Target’s Statement.

No investment advice
The information in this Target’s Statement does not constitute financial product advice. This Target’s
Statement has been prepared without reference to your particular investment objectives, financial situation,
taxation position and needs. It is important that you read this Target’s Statement in its entirety before making
any investment decision and any decision relating to the Offer. If you are in any doubt in relation to these
matters, you should consult your investment, financial, taxation or other professional adviser.

Defined Terms
This Target’s Statement uses a number of capitalised terms which are defined in section 19. Section 19 also
contains some of the rules of interpretation that apply to this Target’s Statement.

Disclaimer regarding forward looking statements
This Target’s Statement contains certain forward looking statements. Shareholders should note that forward
looking statements are only predictions and are subject to inherent uncertainties in that they may be affected
by a variety of known and unknown risks, variables and other factors which could cause actual values or
results, performance or achievements to differ materially from implied values or anticipated results,
performance or achievements expressed or implied in those forward looking statements. Such risks, variables
and other factors include matters specific to Coopers, as well as economic and financial market conditions,
legislative, fiscal or regulatory developments and risks associated with the business and the operation of
Coopers.
None of Coopers, any of its officers, any person named in this Target’s Statement with their consent or any
person involved in the preparation of this Target’s Statement makes any representation or warranty (either
express or implied) or gives any assurance that the implied values, anticipated results, performance or
achievements expressed or implied in forward looking statements contained in this Target’s Statement will be
achieved, and you are cautioned not to place undue reliance on these statements.
The forward looking statements in this Target’s Statement reflect views held only as at the date of the Target’s
Statement.

Shareholder information number
If Shareholders have any questions in relation to the Offer, they should call Haydn Duffield, Company
Secretary, on (08) 8440 1860, Monday to Friday between 9.00am and 5.00pm (Adelaide time). To the extent
required under the Corporations Act, calls to Coopers by Shareholders will be recorded, indexed and stored.
Key reasons why you should REJECT Lion Nathan’s offer

    1
        Your Company’s performance has been outstanding under current
        management. We continue to invest in delivering additional future
        growth.

    2
        Lion Nathan’s Offer does not reflect full control value. It does not reflect
        potential synergies or the strategic value of Coopers.

    3
        The Independent Expert has concluded that the Offer is not fair and
        not reasonable1.

    4
        Coopers is offering its Shareholders an alternative path to liquidity
        through an equal access Share Buy-Back. Coopers’ ongoing capital
        management policy will also facilitate future liquidity for Shareholders.

    5
        Coopers’ ability to continue its successful growth may be compromised
        if Lion Nathan becomes a significant Shareholder.

    6
        Lion Nathan’s Offer is opportunistic, unclear and uncertain.
Notes:
1       See section 2.3 and the Independent Expert’s Report in appendix 1 and in particular, the evaluation of Lion Nathan’s Offer contained in that report.

Rob Murray, CEO of Lion Nathan said:
“We expect any holding [in Coopers] will be a good investment in its own right”.
Source: Lion Nathan media release, 1 September 2005.

Why would Coopers’ Shareholders want to sell now?
– REJECT Lion Nathan’s Offer: hold on to this “good investment”!
                                                                                                                                                          1
Chairman’s Letter
15 November 2005

Dear Shareholder,
Recently you should have received Lion Nathan’s conditional Offer to
acquire some or all of your Coopers’ Shares.
Each Director (except David Kingston, who has a conflict of interest as
outlined in section 15.1 and is therefore unable to make a recommendation) recommends that you REJECT
Lion Nathan’s Offer. To REJECT the Offer you need to take no action in relation to documents received
from Lion Nathan.
This document sets out the detailed reasons why you should REJECT Lion Nathan’s Offer.
In October, your Company announced a record revenue result for the year ended 30 June 2005, reporting a
51% increase in Net Profit over the prior year and an increased final dividend of $3 per Share. This Target’s
Statement sets out the Directors’ Forecasts for Coopers for the year ending 30 June 2006, which show a
significant further increase in underlying profitability.
This exceptional performance reflects the significant investment that Coopers has made in the future of the
business and the strong growth that Coopers is achieving around Australia. The Company’s performance has
also resulted in a significant increase in the value of your Coopers’ Shares.
Shareholders who accept Lion Nathan’s Offer may not end up selling to Lion Nathan at the Offer Price. It is
important to note that the Coopers Constitution states that existing Shareholders and Member’s Relatives
have the ability to acquire any Shares offered for sale by other Shareholders, at Fair Value. KPMG recently
concluded that the Fair Value (as at 28 September 2005) for the individual class C Shares subject to a recent
Transfer Notice was $260 per Share.
Your Board believes that the price that Lion Nathan is offering to acquire Coopers does not appropriately
reflect the full control value of your Company. Control of a company confers a value over and above the
value of a minority shareholding, as it gives the acquirer the ability to change the way a company is managed,
control of the company’s cash flows and access to synergies. Grant Samuel, the Independent Expert, has
assessed Lion Nathan’s Offer compared to its view of control value and has concluded that Lion Nathan’s
Offer is “not fair” and “not reasonable”. You should read section 2.3 and Grant Samuel’s Independent
Expert’s Report in appendix 1 and in particular their evaluation of Lion Nathan’s Offer contained in that
report. Grant Samuel has valued Coopers’ Shares at between $284 – $320.
While all Directors (except David Kingston, who has a conflict of interest as outlined in section 15.1 and is
therefore unable to make a recommendation) recommend that you REJECT Lion Nathan’s Offer, your
Directors also recognise that some Shareholders may want to sell some or all of their Coopers’ Shares. As was
indicated when your Managing Director wrote to you in August 2005, your Board has been giving thought to
capital management initiatives and was therefore pleased to announce on 7 November 2005 a Share Buy-
Back available to all Shareholders, subject to approval of the Buy-Back at an extraordinary general
meeting to be held on 7 December 2005.
This initial Buy-Back of up to 15% of the Company’s Shares will provide an alternative path to liquidity for
Shareholders who want to sell some or all of their Shares. Shareholders will have the opportunity to consider
selling Shares to the Company at $260 per Share, while protecting the best interests of the Company for
remaining Shareholders.

2
Details of the Buy-Back and how to participate are set out in the Buy-Back Documents that accompany this
Target’s Statement. These documents also outline the Board’s commitment to future Buy-Backs as part of an
ongoing capital management policy, which includes future annual buy-backs at prices greater than $260 per
Share if Coopers’ EBITDA continues to grow.
The success of our Company and the incredible brand loyalty that we enjoy today has come through our focus
on quality products and strong heritage. After 143 years, Coopers Brewery still remains almost entirely owned
by descendants of its founder, Thomas Cooper. Our customers trust us and know that you can still meet a
Cooper – these attributes and Coopers’ rich heritage may be lost forever if Lion Nathan acquires a stake
in Coopers.
We are committed to growing Coopers, increasing Shareholder value and distributing excess cash to
Shareholders through future dividends, buy-backs and other capital management initiatives.
I encourage you to read this Target’s Statement carefully. If you have any questions in relation to this
document or the Buy-Back, please call Haydn Duffield on (08) 8440 1860, Monday to Friday between 9.00am
and 5.00pm (Adelaide time). If you are in any doubt as to what you should do, you should consult your
professional adviser.


Yours sincerely,




Glenn Cooper AM
Executive Chairman
Coopers Brewery Limited




Coopers’ strength
and brand loyalty
has come through
our focus on
quality products,
handmade by the
Coopers family.
These represent
the Coopers
advantage.


                                                                                                           3
Contents
PART A                                                                          page
1            What to do                                                            8
2            Key reasons why you should REJECT Lion Nathan’s Offer                 9
3            Lion Nathan’s strategies and public statements are contradictory     24
4            Coopers’ responses to assertions made by Lion Nathan                 26
5            Frequently asked questions                                           29

PART B
6            Overview of Coopers                                                  34
7            Financial performance                                                37
8            Do you want to acquire more Coopers Shares?                          59

PART C
9            Summary of information for Shareholders                              62
10           Lion Nathan’s Offer                                                  63
11           Pre-Emptive Rights Regime                                            75
12           Requisitioned EGM                                                    88
13           Buy-Back EGM                                                         93
14           Buy-Back details                                                     96

PART D
15           Directors’ recommendation and interests                             102

PART E
16           Material litigation                                                 108
17           Takeovers Panel proceedings                                         112
18           Additional information                                              113

PART F
19           Interpretation                                                      120
20           Authorisation                                                       124

APPENDICES
Appendix 1   Independent Expert’s Report
Appendix 2   Independent Accountant’s Report
Appendix 3   Extracts from the Coopers Constitution
Appendix 4   Share allocation policy




4
Key dates
Lion Nathan’s Offer                                                                                           Thursday, 3 November 2005

Target’s Statement                                                                                             Tuesday, 15 November 2005

Extraordinary General Meeting requisitioned by Shareholders                                      10.00am Tuesday, 29 November 20054

Annual General Meeting                                                                            11.00am Tuesday, 29 November 2005

Record date for participation in the Buy-Back                                                         5.00pm Tuesday, 6 December 2005

Extraordinary General Meeting to approve the Buy-Back                                          10.30am Wednesday, 7 December 2005

Expiry of Buy-Back Offer Period                                                                       5.00pm Friday, 16 December 2005

Closing Date for your acceptance of Lion Nathan’s Offer 1, 2                                                  Tuesday, 20 December 2005

Offer Closing Date1, 3                                                                                          Tuesday, 28 February 2006




Notes:
1   Unless extended or withdrawn in accordance with the Corporations Act.
2   If you wish to accept Lion Nathan's Offer you should ensure that Lion Nathan receives your Transfer Notice by this date.
3   If you accept Lion Nathan's Offer but Lion Nathan Australia does not become Eligible to acquire any of your Shares by this date, your acceptance
    will not be completed and Lion Nathan’s Offer will lapse. However, you may be required to sell your Shares under the Pre-Emptive Rights Regime at
    Fair Value, which could be lower than Lion Nathan’s Offer Price.
4   On 11 October 2005, the Federal Court granted an injunction restraining the holding of the Requisitioned EGM but gave liberty to Coopers to
    apply to discharge the injunction upon 24 hours’ notice. On 8 November 2005, Coopers applied for the injunction to be discharged and the
    Requisitioned EGM reconvened. The Court hearing commenced on 11 November 2005 and has been adjourned until 16 November 2005. Lion
    Nathan is resisting the application. Subject to the discharge of the injunction, Coopers intends to reconvene the Requisitioned EGM at 10.00am on
    Tuesday, 29 November 2005 and send a Notice of Requisitioned EGM to Shareholders. See section 12 for more information.


                                                                                                                                                   5
    This page has been intentionally left blank.




6
PART A


1.   What to do


2.   Key reasons why you should REJECT Lion Nathan’s Offer


3.   Lion Nathan’s strategies and public statements are contradictory


4.   Coopers’ responses to assertions made by Lion Nathan


5.   Frequently asked questions




                                                                        7
     PART A - 1. What to do

How to REJECT Lion Nathan’s Offer
1.     To REJECT the Offer, you need to take no action in relation to
       documents received from Lion Nathan.
2.     You should read this Target’s Statement, which sets out the reasons why
       you should REJECT the Offer.


How to consider selling Shares into the Buy-Back
1.     The Board recognises that certain Shareholders may want an alternative
       path to liquidity. Shareholders wishing to sell some or all of their Shares
       are encouraged to consider the terms of the Company-sponsored Buy-
       Back. Details of the Buy-Back are contained in the Buy-Back Documents
       that accompany this Target’s Statement.
2.     Your Board recommends that all Coopers’ Shareholders vote to approve
       the Buy-Back.



If you have any questions please call Haydn Duffield at Coopers on (08) 8440 1860 Monday to Friday
between 9:00am and 5:00pm (Adelaide time).
To the extent required under the Corporations Act, calls to this telephone number by Shareholders will be
recorded, indexed and stored.




8
     PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer


     2.1. Your Company’s performance has been outstanding under current
          management. We continue to invest in delivering additional future
          growth

Coopers’ performance under current management has been outstanding. The recently released results for the
year ended 30 June 2005 show revenue from sale of goods increased by 18.4% to a record high of $126.6 million,
EBITDA increased by 41.5% to $26.2 million and dividends for the year increased by 108% to $4.05 per Share.
As a result of this performance, there has been a significant increase in the value of your Shares.



                                                                                                                                                                           320


                                          31.6                                                         600                                                                284
                                                                                                                                                          260

                           26.2
                                                                                        405



             18.5
                                                                          195

                                                                                                                                                45
                                                                                                                                    16




Source: Coopers                                           Source: Coopers                                             Source: Coopers

Notes:
The Directors’ Forecasts for the financial year ending 30 June 2006, including the assumptions on which the Directors’ Forecasts are based and other explanatory notes, are set
out in section 7. The assumptions underlying the Directors' Forecasts have been independently reviewed by Ernst & Young. Ernst & Young’s Independent Accountants Report
is included in appendix 2.
KPMG’s assessment of Fair Value for the purposes of article 42 of the Coopers Constitution in 1999 and 2005 differs from the assessment by it of “fair market value” in 2003 and
the assessment undertaken by Grant Samuel in the Independent Expert’s Report. For details of the Fair Value Mechanism, see section 11.2.




The Directors’ Forecasts show continued strong growth in
Coopers’ earnings and dividends in 2006. Directors who own
Shares are not selling them as they continue to believe
Shares will be worth more in the future
                                                                                                                                                                             9
    PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer

Coopers is growing faster than its major competitors and the market
Coopers’ growth is extremely impressive given that it operates in a declining total beer market and faces major
competitors with significant resources.
In the year ended 30 June 2005, Coopers’ share of the total beer market grew by nearly 13%. (Source: Coopers)
In the premium beer market, Coopers’ superior growth illustrates that it is out-performing Lion Nathan. Your
Board believes that if this trend continues, Coopers will continue to gain market share at Lion Nathan’s
expense in the premium beer market, which will benefit Coopers and its Shareholders in the future.




                     Poor                                                             Strong
                 performance                                                       performance

                                                                                         24%


                                                                  19%


                                           15%


                     10%




                  Lion Nathan        Total premium beer           CUB                   Coopers

Source: Simtac




10
   PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer

Significant investment has been made to generate future profit, dividends
and share value growth

Coopers has made considerable investments in recent years in infrastructure, operational assets and the
Coopers brand to drive the future growth of the business.
• $40 million to build our new brewery at Regency Park in 2001.
• Additional capital investment in the new facility of over $32 million.
• Significant ongoing investment in developing the value of the Coopers’ brand.
• Establishment of our national distribution business, Premium Beverages, to drive and support our strong
  interstate growth.
The new brewery is recognised as being a state-of-the-art facility, with considerable scope for future growth
and development.
The benefits of these investments are only just starting to be reflected in growing profits, increasing cashflows,
higher dividends and greater Shareholder value.




If Lion Nathan acquires Coopers now, it will gain from these investments
at your expense




Shareholders who sell now could miss significant future
growth, dividends and buy-back opportunities
                                                                                                              11
    PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer


    2.2. Lion Nathan’s Offer does not reflect full control value, potential
         synergies or the strategic value of Coopers

Full control value
While the Board believes that the majority of Shareholders will not accept the Offer, there is a risk that by
acquiring Shares under its Offer, Lion Nathan could:
• Act as a deterrent to other parties who are prepared to pay a full control premium by Lion Nathan
  obtaining first tier pre-emptive rights.
• Continue to acquire Shares at less than an appropriate control value as under the first tier pre-emptive
  rights, Lion Nathan could acquire Shares at Fair Value.
• Acquire sufficient Shares to allow it to block special resolution Shareholder votes, which may impact the
  ability of the Board and the majority of Shareholders to control the future development of the Company.
  This is referred to as “negative control”.
Regardless of whether Lion Nathan achieves a controlling stake or negative control, in offering to acquire
100% of Shares it should be offering a full control premium.
The prices paid in previous acquisitions in the beer and wine industries suggest that Lion Nathan is offering
significantly less than full control value. Using the implied multiples of those transactions and applying them
to Coopers’ forecast EBITDA for the current year ending 30 June 2006 of $31.6 million gives the following
control price range:


                                                         Current year Enterprise Value / EBITDA (x)



          Lion Nathan’s Offer Price                      11.4x                                 260




                                                         15.8x                                                361



                                                         15.9x                                                 364


  Share price based on the historic,
    multiple of 19.4 times Coopers
            historic (2005) EBITDA                                                                              368
                    that Lion Nathan
     claims is “demonstratably fair”



                                                               Implied Coopers Share Price ($)

Source: Company filings, other publicly available information, Lion Nathan media release (1 September 2005)

Note: this chart is not a valuation of Coopers and should not be relied upon as a valuation.

12
    PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer

Lion Nathan claimed its Offer was demonstrably fair on the basis that it represents 19.4 times Coopers’
historic EBITDA (Source: Lion Nathan media release, 1 September 2005). Coopers’ EBITDA for the year
ended 30 June 2005 was $26.2m and applying this multiple, which Lion Nathan claims compares favourably
with precedent transactions and sector trading benchmarks, results in a “demonstrably fair” price of $368 per
Share.


Value of synergies not fully reflected
Lion Nathan’s Offer does not fully value the significant financial synergy benefits that could be realised by Lion
Nathan if it acquires control of Coopers:
• Lion Nathan has previously indicated to Coopers that it wanted to transfer production of its South Australian
  beer brands to Coopers Brewery.
• Based on estimates prepared by Coopers’ management, the Board believes that synergy benefits of up to $20
  million per annum at an EBITDA level may be available to Lion Nathan. Management’s estimates were based
  on discussions held with Lion Nathan in 2004, and Lion Nathan’s own estimates of potential synergy benefits
  available through merging production of its South Australian brands with Coopers1.
• At Lion Nathan’s current trading multiple of 9.7 times 2006 EBITDA2, these estimated synergy benefits
  represent additional value to Lion Nathan of approximately $194 million or an additional $143 per Coopers’
  Share.
• Lion Nathan could also stand to benefit from the sale of its South Australian brewery which is reported to be
  worth approximately $30 million.




Notes:
1   Coopers’ management has estimated the potential synergy of benefits available to Lion Nathan on the basis that 45 million litres of Lion Nathan’s
    current production is transferred to Coopers’ Regency Park Brewery. The estimates are in part based on Lion Nathan’s own assessment of potential
    synergy benefits as presented to Coopers in connection with a joint venture proposal in 2004. The estimated synergy benefits comprise a reduction
    in unit manufacturing costs as a result of increased production volumes; potential savings in procurement of key raw materials; cost savings through
    distributing Coopers’ products through Lion Nathan’s existing interstate distribution infrastructure; cost savings through combining distribution of
    Coopers’ and Lion Nathan’s products within South Australia; cost savings through elimination of duplicated administration costs and other
    overheads; and estimated revenue synergies through increased interstate sales volumes. Where possible, these estimates have been made utilising
    Lion Nathan’s own assumptions provided to Coopers.
2   Independent Expert’s Report, appendix 1.




If Lion Nathan were to pay the same multiple as has been
paid in other similar transactions in the beer and wine
industries, then an Offer Price of more than $360 per Share
would be justified
                                                                                                                                                     13
   PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer

Strategic value
Coopers’ Shareholders are not being offered a fair price to reflect the strategic value to Lion Nathan of owning
Coopers. The acquisition of Coopers would address a number of significant issues that Lion Nathan faces in its
own business:
• A lack of organic growth in a declining total beer market.
• Declining market share in South Australia.
• Under-representation in the growing and profitable premium beer market.
• Significant under-utilisation of its South Australian production facilities.




Lion Nathan’s Offer price does not reflect the significant
enhancement in value or strategic position it could achieve
if it controlled Coopers
14
   PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer


   2.3. The Independent Expert has concluded that the Offer is not fair and
        not reasonable

The Independent Expert, Grant Samuel, has concluded that the Offer is “not fair” and “not reasonable” to
Coopers’ Shareholders.
The Independent Expert has assessed the control value of Coopers’ Shares to be in the range of $284 - $320
per Share. The midpoint of this range, $302, is 16.2% higher than Lion Nathan’s Offer Price.
Each Director (except David Kingston, who has a conflict of interest as outlined in section 15.1 and is
therefore unable to make a recommendation) believes that the Independent Expert’s conclusions support
their view that Lion Nathan’s Offer is substantially less than the control value of your Company and their
recommendation to reject the Offer.
Grant Samuel also made the following points about Lion Nathan’s Offer:
• “Shareholders accepting the Lion Nathan offer in its current form cannot be certain of realising $260 per share.”
• “The Lion Nathan offer remains subject to a number of conditions and could lapse because one or more of the
  conditions was not fulfilled or waived.”
• “In these circumstances, shareholders who had already accepted the Lion Nathan offer could be ‘locked in’ and
  obliged to accept a lower price.”
• “Further, there are alternatives for Shareholders to consider. Coopers has announced its intention to undertake an
  immediate 15% buy-back at $260 per share and to implement further buy-backs in the future.”




                                                                                                                15
   PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer

Grant Samuel highlighted that the following factors may be relevant to the consideration of Lion Nathan’s
Offer by individual Shareholders.
• “Assessing the reasonableness of the Lion Nathan Offer is complex. Overall, Grant Samuel has concluded that the
  Lion Nathan Offer is not reasonable. However, the Lion Nathan Offer would be reasonable for shareholders with
  a requirement for short term liquidity for all or most of their shareholdings, should the Lion Nathan Offer become
  free of conditions.”
• “for Coopers Shareholders with limited or no short term liquidity requirements or a greater appetite for investment
  risk in relation to their Coopers Shareholding, rejection of the Lion Nathan offer (even if unconditional) may be
  more attractive."
The Offer is conditional. Coopers considers that there are a number of conditions that cannot at this time be
fulfilled and a significant risk that further conditions to the Offer may not be fulfilled. If Lion Nathan does
not waive an unfulfilled condition, its Offer will lapse. See section 10.4 for further information about the
consequences of an Offer condition not being fulfilled.
Your Board was pleased to announce a Buy-Back of Shares at a price of $260 per Share. The Buy-Back
represents an alternative path to liquidity for Shareholders who want the opportunity to realise value for some
or all of their investment in Coopers (see sections 2.4 and 14 for further details). Your Board draws your
attention to the fact that the Buy-Back is for up to 15% of the Company's Share capital and is subject to
Shareholder approval. If Shareholder approval is not obtained, the Buy-Back will not proceed. If more than
15% of the Company's Shares are tendered into the Buy-Back, each Buy-Back application will be scaled back
on a pro rata basis in proportion to the total number of Shares tendered into the Buy-Back. There is therefore
a risk that if selling demand is high, Shareholders may be scaled back.




16
   PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer


   2.4. Coopers is offering its Shareholders an alternative path to liquidity,
        through an equal access Share Buy-Back. Coopers’ capital
        management policy will facilitate future liquidity for Shareholders

Coopers’ share buy-back
Coopers has announced a Buy-Back of Shares at a price of $260 per Share, subject to approval of the Buy-
Back at an extraordinary general meeting to be held on 7 December 2005.
• The Buy-Back offers an alternative path to liquidity for those Shareholders who want to sell some or all
  of their Shares. Shareholders who accept Lion Nathan’s Offer do not know how long they will have to
  wait to receive their money, but those who tender their Shares into the Buy-Back are expected to receive
  their money on or about 20 December 2005.
• The Buy-Back provides those Shareholders who wish to sell some or all of their Shares the opportunity to
  do so without Lion Nathan becoming a Shareholder and potentially damaging the future prospects of the
  Company.
The Board draws your attention to the fact that the Buy-Back is for up to 15% of the Company’s Share capital
and is subject to Shareholder approval.
If more than 15% of the Company’s Shares are tendered into the Buy-Back, each Buy-Back application will
be scaled back on a pro-rata basis in proportion to the total number of Shares tendered. There is therefore a
risk that Shareholders may not be able to sell all their tendered Shares into the Buy-Back. Shareholders
seeking to sell some or all of their Shares today are encouraged to consider the Company-sponsored Buy-Back.




                                                                                                         17
   PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer

Ongoing capital management policy
As well as this announced Buy-Back, your Board is also taking this opportunity to communicate an ongoing
capital management policy to Shareholders.
The main purposes of the capital management policy are to:
• Provide ongoing liquidity options for Shareholders.
• Maintain an optimal capital structure and an appropriate level of gearing.
The capital management policy will be implemented through:
• Paying an appropriate level of dividends.
• Ongoing buy-backs and capital returns.
As the first step in implementing the policy, the Board is offering an equal access share Buy-Back of up to
15% of the issued share capital at a price of $260 per share.
Coopers also intends to maintain its current dividend level and expects to make a fully franked payment of
$3.00 per Share for the interim dividend and at least the same amount for the final dividend in the 2006
financial year. This will represent at least a further 48% increase in dividends on top of the 108% increase
that occurred in the 2005 financial year.
The Board will consider at least once each year after release of the audited financial results and otherwise as
determined from time to time, the most appropriate way of implementing the policy, including by way of
dividend payments, buy-backs, capital returns and other liquidity events. The level of liquidity offered in each
year will be dependent upon the operating requirements of the Company, its financial performance, gearing
levels and maintenance of an appropriate capital structure.
The Board intends to provide capital management initiatives in respect of approximately 2.5% - 5% of issued
capital either through a buy-back or capital reduction at least annually over the next four years.
One of the key advantages of Coopers’ ongoing capital management policy is that Shareholders who are
seeking liquidity should not feel the necessity to sell all of their Shares today at $260. It is intended that
future buy-back prices will be determined with reference to any proportional change in EBITDA and
future buy-backs should be at prices greater than the current Buy-Back price if Coopers can continue to
increase its profits. The opposite is also true and if Coopers future EBITDA was to decline, the buy-back
price would fall. The table on the following page sets out a number of illustrative examples of the
calculation of future buy-back prices.




Coopers is offering Shareholders who want an alternative
path to liquidity the opportunity to consider selling Shares to
the Company at $260 per Share, while protecting the best
interests of the Company for remaining Shareholders
18
     PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer

Calculation of future buy-back prices
Future buy-back prices will be determined based on increases or decreases in future EBITDA as illustrated in
the table below.

                 Normalised                  Future                  Increase/             Implied future           Comments
                   2005                    normalised               (decrease)                buy-back
                 EBITDA1                   EBITDA2                in normalised            price per Share
                   ($m)                       ($m)                EBITDA3 (%)                    ($)


                       A                         B                     B/A–1                 B/A x $260


                      26.2                     21.0                   (20.0%)                     208


                      26.2                     23.6                   (10.0%)                     234

                                                                                                                    2005 Buy-Back price,
                      26.2                     26.2                       –                       260               Lion Nathan Offer Price
                                                                                                                    Low end of Independent
                      26.2                     28.6                     9.2%                      284               Expert’s valuation range

                      26.2                     28.8                     10%                       286

                                                                                                                    Mid-point of Independent
                      26.2                     30.4                    16.2%                      302               Expert’s valuation range

                      26.2                     31.4                     20%                       312

                                                                                                                    High end of Independent
                      26.2                     32.3                    23.1%                      320
                                                                                                                    Expert’s valuation range

                      26.2                     34.1                    30.0%                      338


                      26.2                     36.7                    40.0%                      364


                      26.2                     39.3                    50.0%                      390


                      26.2                     41.9                    60.0%                      416

Notes:
1    Normalised 2005 EBITDA is the reported EBITDA before abnormal items for the year ended 30 June 2005, equal to $26.2 million. See section 7,
     note 1 for normalisation adjustments.
2    Future normalised EBITDA is the reported EBITDA before abnormal items for future financial years, presented in accordance with the relevant
     accounting standards for those future financial years.
3.   Increase or decrease in future normalised EBITDA compared to normalised 2005 EBITDA of $26.2 million.
4.   Price at which future buy-backs will be undertaken. Future buy-back prices will be equal to the current Buy-Back price of $260 adjusted for the
     increase or decrease in future normalised EBITDA compared to the normalised 2005 EBITDA of $26.2 million.


                                                                                                                                                  19
   PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer


   2.5. Coopers’ ability to continue its successful growth may be compromised
        if Lion Nathan becomes a significant Shareholder

Coopers’ unique position would be jeopardised with Lion Nathan as a
significant Shareholder
Coopers’ unique marketing and brand position has been a key factor driving the strong growth of Coopers in
recent years.
Coopers’ marketing is based around a number of consistent messages, which could be lost if Lion Nathan
became a significant Shareholder:
• A heritage of family ownership and ongoing family management.
• Independence, Australian ownership and strong connections with South Australia.
• A focus on the highest quality product, true to the vision of Thomas Cooper.




Coopers’ unique positioning and the proven advantages that
this gives the Company would be lost if Lion Nathan became
a significant Shareholder
20
   PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer

Conflict of interest – risk for Coopers’ Shareholders
Coopers has won significant market share from Lion Nathan in recent years and your Board believes Lion
Nathan will do anything to get it back.
By its own admission Lion Nathan’s interests are in conflict with those of Coopers and its Shareholders. Lion
Nathan has said:


 “in the event of partial ownership, the interests of Lion Nathan and Coopers may be different”.
  (Lion Nathan Bidder’s Statement, 3 November 2005)



Lion Nathan has also shown its interests are in conflict with those of Coopers by commencing legal
proceedings against Coopers and funding various other people to commence proceedings against Coopers in
the Courts. At the time of printing, Lion Nathan was running or funding five separate Court actions against
Coopers in two States.
The Board does not believe these actions are appropriate for a company wanting to become a Coopers’
Shareholder and they highlight the significant risks of having Lion Nathan as a Coopers’ Shareholder.
The Board also has concerns about the ability of your Company to compete effectively and continue to take
market share from Lion Nathan if Lion Nathan gains access to confidential and strategic information about
Coopers, through Lion Nathan having representation on Coopers’ Board.




Coopers is growing strongly and taking market share from
Lion Nathan. Having Lion Nathan as a Shareholder may
restrict the Company’s future growth and profitability
                                                                                                         21
    PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer


    2.6. Lion Nathan’s Offer is opportunistic, unclear and uncertain

The Offer is opportunistic
The timing of Lion Nathan’s Offer is opportunistic:
• Lion Nathan announced its intention to make its Offer on 1 September 2005, the day before it lost the
  Court case that declared that Lion Nathan was controlled by Kirin, a Japanese brewer, entitling Coopers
  to remove Lion Nathan’s rights from Coopers’ Constitution. On 2 September 2005, Rob Murray, CEO said
  “[The] Court decision was not unexpected…”
• Lion Nathan’s Offer comes at a time when Coopers is only starting to reap the rewards of significant
  investment in infrastructure and the Coopers brand.
The Board believes Lion Nathan has priced its Offer significantly below full control value, because it still has
a third tier pre-emptive right and has entered into pre-bid agreements to seek to obtain first tier
pre-emptive rights. Without its third tier pre-emptive right Lion Nathan could be exposed to a bidding
competition from among its worldwide competitors if it tried to acquire Coopers and would therefore have to
pay a full control premium.
The Offer is unclear
Lion Nathan is controlled by Kirin. Kirin has not advised the Board what its intentions are for your Company.
The Coopers Constitution contains a Pre-Emptive Rights Regime which requires your Directors to attempt to find
buyers for any Shares that a Shareholder elects to sell to Lion Nathan from among existing Shareholders or Member’s
Relatives or, failing that, to offer them to AMP Life. A buyer under the Pre-Emptive Rights Regime may elect to
purchase available Shares at the price fixed by their seller or at their Fair Value as determined by Coopers’ auditor.
As a result, any Shareholder who elects to accept Lion Nathan’s Offer will be subject to the Pre-Emptive Rights
Regime and, at the time they elect to sell, will not know who they will be selling to or the price that they will receive.
• Full details of the Pre-Emptive Rights Regime are set out in section 11.
KPMG recently concluded that the Fair Value (as at 28 September 2005) for the individual class C Shares subject
to a recent Transfer Notice was $260 per Share1. However, KPMG assessed the value of a class C Share under the
Coopers Constitution without regard to Lion Nathan’s Offer to be $190 (as at 28 September 2005), this indicates
what Fair Value would have been as at that date if Lion Nathan’s Offer did not exist. If a Transfer Notice was lodged
in relation to any of your Shares, and after Lion Nathan’s Offer had lapsed, or after it became increasingly likely that
its Offer would lapse, it is possible that Fair Value of your Shares may be determined to be lower than $260 per Share
and you would be required to sell your Shares at this lower Fair Value.


Notes:
1    You should note that the Recent Fair Value Determination relates only to the Shares that were the subject of a Transfer Notice lodged with
     Coopers and was made for the benefit of the buyers and seller of those Shares. Any future Share transfers at Fair Value will be subject to a
     separate Fair Value determination. KPMG has said that the Recent Fair Value Determination is not intended to be used by Coopers or any
     Shareholder other than for this specific purpose nor is it intended to influence a person in making a decision in relation to Shares. For details of
     the Fair Value Mechanism, see section 11.2.


22
    PART A - 2. Key reasons why you should REJECT Lion Nathan’s Offer

The Offer is uncertain
                                                                                          1
Lion Nathan’s Offer is also subject to a number of conditions that have not been fulfilled or cannot be
fulfilled, notably:
• Clearance by the Australian Competition and Consumer Commission (ACCC).
• Confirmation that Lion Nathan will have one seat on your Board for every 15% of the Coopers’ issued
  capital that it acquires.
• No Share Buy-Back.
• No change to the Coopers Constitution.
• No Material Agreements with worldwide competitors or containing change of control triggers.
If all the conditions to the Offer are not fulfilled or waived before the Offer closes, the Offer will lapse. If you
have submitted a Transfer Notice you may be required to sell your Shares in accordance with the Pre-Emptive
Regime as set out in the Coopers Constitution.
If the Offer lapses (or is withdrawn) it is possible that the Fair Value at which your Shares may be sold under
the Pre-Emptive Rights Regime will be less than Lion Nathan’s Offer price.
KPMG recently assessed the value of a class C Share under the Coopers Constitution without regard to Lion
Nathan’s Offer to be $190 (as at 28 September 2005)3, this indicates what Fair Value would have been as at
that date if Lion Nathan’s Offer did not exist.




Notes:
1   See section 10.3 for a description of the status of Lion Nathan’s conditions.
2   Due to unique personal circumstances Shareholders who wish to sell their Shares should seek professional advice before deciding whether to
    sell Shares to a third party like Lion Nathan or tender their Shares into the Company-sponsored Buy-Back.
3   You should note that the Recent Fair Value Determination relates only to the Shares that were the subject of a Transfer Notice lodged with
    Coopers and was made for the benefit of the buyers and seller of those Shares. Any future Share transfers at Fair Value will be subject to a
    separate Fair Value determination. KPMG has said that the Recent Fair Value Determination is not intended to be used by Coopers or any
    Shareholder other than for this specific purpose nor is it intended to influence a person in making a decision in relation to Shares. For details of
    the Fair Value Mechanism, see section 11.2.



To provide an alternative path to liquidity, your Board has
proposed the Buy-Back and Shareholders who may wish to
sell are encouraged to consider the terms of the Buy-Back2
                                                                                                                                                    23
   PART A - 3. Lion Nathan’s strategies and public statements are
               contradictory

Lion Nathan says one thing but does another
Lion Nathan has said that it admires the achievements of Coopers’ management and employees in recent
years and that its Offer is a strong vote of confidence in the entire Coopers team.
These statements appear to be disingenuous when contrasted with the legal action and media attacks that
have been made by Lion Nathan against Coopers, its Board and management. They also contrast with Lion
Nathan’s failure to outline any specific intentions regarding the future employment of Coopers’ 108
employees.

Lion Nathan has misled you about changes to your Directors’ Share interests
Lion Nathan included a table in its Bidder's Statement which purports to show a 22.3% increase in your
Directors’ relevant interests in Shares over a 13 year period. Coopers informed Lion Nathan that the table
was highly misleading, Lion Nathan has inflated the size of the increase and misled you by:
• Refusing to adjust for a 22.9% overall reduction in issued Share capital.
• Refusing to report on a consistent set of individuals.
• Refusing to adjust for significant changes in the reporting basis for relevant interests.
• Refusing to adjust for relevant interests in which Directors do not have a beneficial interest.
Coopers asked Lion Nathan to delete or amend its misleading table and provided substantial information to
demonstrate just how misleading it was. Lion Nathan refused to accept that its table was misleading and
merely included the information provided by Coopers in footnotes to the table.
Section 15.4 shows a table which makes the necessary adjustments that Lion Nathan refused to make. It
shows an increase of only 4.8% compared to the 22.3% misleadingly claimed by Lion Nathan.

Lion Nathan has disrupted the Coopers’ business
Lion Nathan is involved in five separate Court actions against Coopers, including funding legal action
undertaken by Barry Schrapel and Andrew Short. Lion Nathan has further indicated that it will continue to
instigate legal actions. Rob Murray believes that Lion Nathan’s takeover bid will be “a long, drawn-out and
protracted process”. Source: AAP Newswire, 9 November 2005.
A significant amount of Board and management time is being spent in responding to Lion Nathan’s
opportunistic Offer and defending your Company in these legal actions and proceedings. This diverts Board
and management resources away from its focus of successfully running the Coopers business.




24
   PART A - 3. Lion Nathan’s strategies and public statements are
               contradictory

Lion Nathan is attempting to manipulate the Coopers Constitution by claiming to be a
relative of Barry Schrapel
Lion Nathan has entered into complex pre-bid arrangements with Barry Schrapel under which it claims to be
his relative, for the purposes of circumventing the Pre-Emptive Rights Regime. this would deny other
Shareholders the opportunity to acquire Shares under the first tier pre-emptive rights. Lion Nathan has
commenced Court proceedings against Coopers to have these arrangements enforced. Coopers denies Lion
Nathan’s claims that its subsidiary is a Member’s Relative of Mr Schrapel and will defend these proceedings
to prevent Lion Nathan manipulating the Coopers Constitution.

Lion Nathan attempted to direct the course of work undertaken by Coopers’ auditor
Lion Nathan entered into pre-bid arrangements with a select number of Coopers’ Shareholders in which it
willingly assumed the risk that the Coopers auditor may determine Fair Value for the Shares covered by these
arrangements to be less than its Offer Price (a risk that it has refused to assume for Shareholders under its
Offer).
Lion Nathan then tried to eliminate this risk by attempting to direct the course of a Fair Value assessment
being undertaken by the Coopers auditor. This involved threatening the auditor with Court proceedings,
alleging that the auditor owed it duties that were not in fact owed and claiming that it would suffer “loss” if
Fair Value was determined to be less than its Offer Price.

Lion Nathan has timed its bid opportunistically
Lion Nathan’s Offer was announced one day before the Supreme Court of South Australia’s decision declaring
that Lion Nathan had undergone a change of control. Lion Nathan has since opposed the rights that this
decision gave Coopers’ Shareholders to change the Coopers Constitution to Lion Nathan’s third tier pre-
emptive rights and provisions that deem it not to be a competitor of Coopers.
Although Lion Nathan launched a Full Court appeal against the decision, it tried to resist Coopers’ successful
attempts to have the appeal heard on an expedited basis. On 19 October 2005, Lion Nathan's appeal was
rejected by a 3-0 decision of the Full Court of the Supreme Court.

Lion Nathan’s intentions in South Australia are unclear
In September, Lion Nathan wrote to various Members of South Australia’s Parliament stating that it was
committed to its investment in South Australia. This has been repeated and emphasised in Lion Nathan’s
Bidder’s Statement to Shareholders.
Lion Nathan has not publicly addressed the questions which hang over the future of its Southwark brewery.
Lion Nathan previously outlined to Coopers its desire to merge significant production into Regency Park and
transfer some other production interstate. It has also indicated that it could look to produce Coopers outside
of South Australia in the future.




                                                                                                           25
    PART A - 4. Coopers’ responses to assertions made by Lion Nathan

In its Bidder’s Statement, Lion Nathan made a number of assertions as to why Coopers’ Shareholders should
accept its Offer.

Lion Nathan’s claim                                                  Coopers’ response

“We believe the Offer Price of                                       • The Independent Expert, Grant Samuel, has concluded
$260 per Share is a fair and                                           that the Offer is “not fair” and “not reasonable” to
compelling price for your                                              Coopers’ Shareholders1.
Shares in Coopers.”                                                  • The Offer does not fully value the performance of the
                                                                       Company, its potential future growth or the value of
                                                                       Coopers to Lion Nathan – see sections 2.1 and 2.2.
                                                                     • The Offer implies an earnings multiple which is
                                                                       inadequate relative to other transactions in the beer and
                                                                       wine industries, e.g. San Miguel/James Boags and
                                                                       Fosters/Southcorp – see section 2.2.


“The Offer is intended to                                            • Coopers’ Shareholders can sell their Shares at any time,
provide a rare opportunity to                                          subject to the Pre-Emptive Rights Regime.
sell all or some of your                                             • Coopers has announced a Buy-Back at $260 per Share to
shareholding.”                                                         give Shareholders an alternative path to liquidity.
“Given that Coopers is an                                            • The Company’s ongoing capital management policy is
unlisted company there are                                             intended to provide regular future liquidity opportunities.
limited opportunities for you to
sell your Shares.”




Notes:
1    See section 2.3 and the Independent Expert’s Report in appendix 1 and, in particular, the evaluation of Lion Nathan’s Offer contained in that report.


26
   PART A - 4. Coopers’ responses to assertions made by Lion Nathan

Lion Nathan’s claim               Coopers’ response

“The Offer Price represents a     • The value of Coopers has increased significantly over
significant premium to known        recent years as a result of substantial investments made by
pricing benchmarks for              the Company, the repayment of debt and Coopers’ strong
Coopers Shares.”                    increase in profitability.
                                  • The comparison with prices at which Coopers’ Shares
                                    have traded up to six years ago is not relevant.
                                  • The Independent Expert has determined the value of
                                    Coopers’ Shares to be in the range $284 - $320 per Share.
                                  • The prices paid in previous acquisitions in the sector
                                    suggest that Lion Nathan is offering significantly less than
                                    full control value. See section 2.2.

"The Offer increases Lion         • Lion Nathan previously outlined to Coopers its intention
Nathan’s significant investment     to merge significant production into Regency Park and
in and commitment to South          transfer some other production interstate. It has also
Australia.”                         indicated that it could look to produce Coopers outside of
                                    South Australia in the future.
                                  • If Lion Nathan acquires control of Coopers and proceeds
                                    in a manner consistent with these proposals it may result
                                    in a reduction in the size of the brewing industry in South
                                    Australia and the loss of employment and business
                                    opportunities in South Australia.

“A number of Coopers              • Lion Nathan has entered into pre-bid arrangements with
Shareholders have welcomed          11 Coopers’ Shareholders covering just 2.2% of Coopers’
the Offer and endorsed the          Shares.
Offer Price.”                     • Lion Nathan has unfairly discriminated between
                                    Shareholders by offering special benefits under these
                                    arrangements that are not available under the Offer.
                                  • Lion Nathan is attempting to manipulate the Coopers’
                                    Constitution through these arrangements and deny
                                    Shareholders the opportunity to acquire Shares under the
                                    first-tier pre-emptive rights.




                                                                                            27
   PART A - 4. Coopers’ responses to assertions made by Lion Nathan

Lion Nathan’s claim               Coopers’ response

“Coopers has declined to          • During 2004 and 2005 Coopers had a number of
provide Lion Nathan with any        discussions with Lion Nathan regarding potential joint
non-public information              venture arrangements proposed by Lion Nathan.
concerning the business,          • During the course of the 2004 discussions, Coopers
financial position or prospects     provided Lion Nathan with some non-public
of Coopers...”                      information, specifically for the purpose of allowing Lion
                                    Nathan to assess the financial benefit of joint venture
                                    production and distribution arrangements.
                                  • This information should have enabled Lion Nathan to
                                    estimate the level of potential synergies that might be
                                    available through a joint venture with Coopers. Lion
                                    Nathan has provided documents to Coopers specifying
                                    the quantum of expected synergy benefits and how these
                                    could be achieved.


“In the period from 1992 to       • Lion Nathan has misled you about the changes to your
2005, some of your current          Directors’ relevant interests. Section 15.4 shows a table
Directors increased their           which makes necessary adjustments that Lion Nathan
relevant interests in Coopers       refused to make. It shows an increase of only 4.8%.
as set out in the table below.
Change +22.3%.”




28
    PART A - 5. Frequently asked questions

Set out below is a list of questions that may be asked by Shareholders and applicable answers in relation to
Lion Nathan’s Offer.

Question                                              Answer

What is Lion Nathan offering                          • Lion Nathan is offering to acquire some or all of your Coopers
for my Shares?                                          Shares. The consideration that Lion Nathan is offering for your
                                                        Coopers Shares is $260 per Share. However, you should take into
                                                        account that any Shares offered to Lion Nathan will be subject to
                                                        the Pre-Emptive Rights Regime in the Coopers’ Constitution and
                                                        must be offered to existing Shareholders, Members’ Relatives and
                                                        AMP Life before Lion Nathan. As a result, it is possible that
                                                        Shareholders who accept Lion Nathan’s Offer may receive less than
                                                        $260 per Share1.


What is the conclusion of the                         • The Independent Expert has concluded that Lion Nathan’s offer is
Independent Expert?                                     “not fair” and “not reasonable” 2.

What do Directors recommend?                          • Each Director (except for David Kingston, who has a conflict of
                                                        interest as outlined in section 15.1 and is therefore unable to make
                                                        a recommendation) recommends that you REJECT Lion Nathan’s
                                                        Offer. A summary of the reasons for their recommendation is set out
                                                        in section 2.

What should I do as a Coopers                         • To REJECT Lion Nathan’s Offer, you need take no action in
Shareholder?                                            relation to documents received from Lion Nathan.
                                                           If you wish to sell your Shares, your Board encourages you to
                                                           consider the Company-sponsored Buy-Back. Details of the Buy-Back
                                                           and an explanation of how to participate are included in the Buy-
                                                           Back Documents that you should have received with this Target’s
                                                           Statement.




Notes:
1   For details of the Fair Value Mechanism, see section 11.2.
2   See section 2.3 and the Independent Expert’s Report in appendix 1, in particular, the evaluation of Lion Nathan’s Offer contained in that report.


                                                                                                                                                    29
  PART A - 5. Frequently asked questions

Question                     Answer

When do I have to make a     • If you wish to REJECT Lion Nathan’s Offer, you do not need to do
decision?                      anything.
                                If you choose to accept Lion Nathan’s Offer, you must do so before
                                the Closing Date. The Closing Date is currently Tuesday, 20
                                December 2005, but the Offer Period may be extended in certain
                                circumstances.
                                If you wish to participate in the Company-sponsored Buy-Back, you
                                should read and complete the Buy-Back documentation before
                                5.00pm (Adelaide time) on Friday, 16 December 2005 (unless the
                                Board extends the Buy-Back period).

How do I accept the Offer?   • If you choose to accept Lion Nathan’s Offer, you should follow the
                               instructions set out in the Lion Nathan Bidder’s Statement.

What happens if the Offer    • Your Directors (except for David Kingston, who has a conflict of
Price is raised?               interest as outlined in section 15.1 and is therefore unable to make
                               a recommendation) will consider any revised Offer and advise you
                               accordingly.

What are the conditions to   • See section 10.3 for a discussion of the Offer conditions.
the Offer?

Can I revoke my acceptance   • Once you accept the Offer by sending a Transfer Notice to Lion
of the Offer?                  Nathan, you cannot (without its consent) prevent Lion Nathan
                               from lodging the Transfer Notice with Coopers. Once a Transfer
                               Notice has been lodged with Coopers, it is irrevocable except with
                               the consent of the Directors. There can be no guarantee that the
                               discretion to permit revocation will be exercised in any particular
                               case.




30
    PART A - 5. Frequently asked questions

Question                                             Answer

What happens if the                                  • If the conditions to the Offer are not fulfilled or waived before the
conditions to the Offer are not                        Offer closes, the Offer will lapse. If you have submitted a Transfer
fulfilled or waived?                                   Notice you may be required to sell your Shares in accordance with
                                                       the Pre-Emptive Rights Regime as set out in Coopers Constitution.
                                                          If the Offer lapses (or is withdrawn) it is possible that the Fair Value
                                                          at which your Shares may be sold under the Pre-Emptive Rights
                                                          Regime will be less than $260 per Share.
                                                          KPMG recently assessed the value of a class C Share under the
                                                          Coopers Constitution without regard to Lion Nathan’s Offer to be
                                                          $1901, this indicates what Fair Value would have been as at that date
                                                          if Lion Nathan’s Offer did not exist.
                                                          Despite this uncertainty Coopers has offered the opportunity for
                                                          Shareholders to sell some or all of their Shares into a Company-
                                                          sponsored Buy-Back of up to 15% of existing Shares, at $260 per
                                                          Share, subject to Shareholder approval.
                                                          The pricing of the Buy-Back is not subject to uncertainty relating to
                                                          Fair Value assessment, and does not depend upon the satisfaction of
                                                          the conditions to Lion Nathan’s Offer.
What if I have further
questions about the Offer?                           • If you have any further questions in relation to the Offer, you can
                                                       call Haydn Duffield, Company Secretary, on (08) 8440 1860,
                                                       Monday to Friday between 9.00am and 5.00pm (Adelaide time).
                                                          To the extent required under the Corporations Act, calls to Coopers
                                                          by Shareholders will be recorded, indexed and stored.
What is the status of the
Requisitioned EGM?                                   • On 11 October 2005, the Federal Court granted an injunction
                                                       restraining the holding of the Requisitioned EGM but gave liberty
                                                       to Coopers to apply to discharge the injunction upon 24 hours’
                                                       notice. On 8 November 2005, Coopers applied for the injunction to
                                                       be discharged and the Requisitioned EGM reconvened. The Court
                                                       hearing commenced on 11 November 2005 and has been adjourned
                                                       until 16 November 2005. Lion Nathan is resisting the application.
                                                       Subject to the discharge of the injunction, Coopers intends to
                                                       reconvene the Requisitioned EGM at 10.00am on Tuesday, 29
                                                       November 2005 and send a Notice of Requisitioned EGM to
                                                       Shareholders. See section 12 for more information.
Notes:
1   You should note that the Recent Fair Value Determination relates only to the Shares that were the subject of a Transfer Notice lodged with
    Coopers and was made for the benefit of the buyers and seller of those Shares. Any future Share transfers at Fair Value will be subject to a
    separate Fair Value determination. KPMG has said that the Recent Fair Value Determination is not intended to be used by Coopers or any
    Shareholder other than for this specific purpose nor is it intended to influence a person in making a decision in relation to Shares. For details of
    the Fair Value Mechanism, see section 11.2.

                                                                                                                                                    31
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32
PART B


6.   Overview of Coopers


7.   Financial performance


8.   Do you want to acquire more Coopers Shares?




                                                   33
     PART B - 6. Overview of Coopers

History and description of the business
Coopers was founded in 1862 by Thomas Cooper, and remains as Australia’s last significant independent
brewer. Today Coopers is an unlisted public company based in Adelaide. For more history of Coopers and the
Cooper family see the inside back cover.
• Coopers’ products are marketed nationwide and internationally (in Europe, North America and Asia).
  The business has three divisions: Beer, Home Brew and Malt Extract, which each occupy a leading
  position in their markets.
• Beer: Coopers is the third largest brewer in Australia, with 3.2%1 of the national beer market and 22.9%1
  of the South Australian beer market. Coopers has a strong, growing position within the premium beer
  market, with a 12%2 share.
• Home Brew: Coopers is the market leader in Australia and the world’s largest manufacturer of home brew
  products.
• Malt Extract: Coopers is Australia's largest supplier of malt extract. The Company supplies malt extract
  to major food manufacturers around the world (Australia, USA, Canada, Japan, China, Malaysia,
  Indonesia, Hong Kong, Thailand and South Korea). Apart from its use in brewing, malt extract is also
  widely used in baking, confectionery, breakfast cereals, malt beverages, dairy products, condiments and as
  a caramel substitute.


    2005 revenue by product                                                          2005 beer sales by volume   2005 beer sales by v




Source: Coopers Annual Report 2005                                                 Source: Coopers




Notes:
1    Source: Coopers; market share by sales value as at 30 June 2005
2    Source: Simtac; market share by sales value for the year ended 30 June 2005


34
   PART B - 6. Overview of Coopers

Beer products
All beer produced by Coopers is labelled under the Coopers brand. Coopers’ products include:
• Ales: Coopers Sparkling Ale, Coopers Original Pale Ale, Coopers Mild Ale, Coopers Dark Ale,
  Dr Tim’s Traditional Ale, Heritage Premium Ale and Coopers Extra Strong Vintage Ale.
• Lagers: Coopers Premium Lager.
• Stout: Coopers Best Extra Stout and Coopers Special Old Stout.
• Light: Coopers Premium Light and Coopers Birell (brewed by Coopers in Australia under licence from
  Carlsberg).
• In addition Coopers, through its 80% ownership of Premium Beverages, holds the licence to distribute
  Budweiser in Australia.


Home brew products
Home brew is sold as concentrated wort (malt derived liquid). Coopers makes 19 varieties of home brew beer
kits - including lagers, ales, stouts and ginger beer.


Production facilities
Coopers relocated from its historic brewery at Leabrook to the new brewery at Regency Park in 2001. The new
brewery, one of the most advanced in Australia, was constructed at a cost of around $40 million.
As a result of the move:
• Coopers’ annual beer production capacity increased by 60% from 250,000 hectalitres to about 400,000
  hectalitres, and is now over 600,000 hectalitres.
• Brewhouse capacity increased to nearly 2.5 times that of the former site.
• Capacity for malt extract doubled, from under 10,000 tonnes per annum to more than 20,000 tonnes per
  annum.
Coopers has continued to expand the capacity of Regency Park to meet strong and growing demand. Coopers
recently installed a new $3.6 million bottle filler to enable it to continue to meet the growing demand for its
beers. The new filler increases the speed of the bottling line from 840 bottles a minute to up to 1,200 bottles a
minute. The new bottle filler was part of more than $11 million of capital expenditure during the year ended
30 June 2005. Other items of capital expenditure included a major warehouse extension, the addition of two
new fermenters and two new yeast tanks, the acquisition of a new can seamer, the installation of a new keg filler
(which doubled filling speed from 60 to 120 kegs per hour), the purchase of 20,000 additional kegs, and the
installation of a new packaging machine to enable new types of packaging including baskets.




                                                                                                             35
   PART B - 6. Overview of Coopers

Distribution
Premium Beverages, based in Melbourne, was set up in March 2003 to take advantage of the growth in
demand for premium and imported beers in Australia. Premium Beverages is a joint venture between Coopers
and American Beverages and is now 80% owned by Coopers (up from 75% in 2003). The joint venture was
set up after discussion about future opportunities to brew under licence from Anheuser-Busch Companies,
Inc.
Premium Beverages distributes Coopers products in all states of Australia outside of South Australia and the
Northern Territory. Premium Beverages also holds the licence to distribute and promote Budweiser in
Australia.
Premium Beverages has been hugely successful in expanding Coopers’ interstate sales. Since the
establishment of Premium Beverages, Coopers’ interstate sales have grown from less than ten million litres to
an expected 19 million litres this financial year.
Samuel Smith & Sons is a wholesaler which buys from Premium Beverages and supplies Coopers’ beer
products interstate to regional outlets outside of the metropolitan centres, and to restaurants and cafes
generally. It has a contract with Premium Beverages which includes performance based remuneration. The
volume of product being sold by Samuel Smith & Sons is now similar to that which it sold prior to the
establishment of Premium Beverages, when Samuel Smith & Sons lost the sole agency arrangement that it
had previously enjoyed with Coopers. The relationship between Samuel Smith & Sons and Premium
Beverages is working well, with both parties pleased with ongoing progress.




36
   PART B - 7. Financial performance


   7.1. Financial Highlights

Coopers announced a record revenue result for the year ended 30 June 2005, with strong underlying growth
in sales, profitability and dividend distributions.
• Revenue of $126.6 million; up 18.4% on the previous year.
• EBITDA of $26.2 million; up 41.5% the previous year.
• NPAT of $14.3 million; up 51.8% on the previous year.
• Full year dividend of $4.05 per Share; up 107.7% on the previous year.
Coopers expects the strong growth in revenue and the improvement in financial performance to continue in
the year ending 30 June 2006.
• Revenue is forecast to increase by 15.3% to $146.0 million, with annual beer volume forecast to exceed
  the 50 million litres mark for the first time in Coopers’ history. Interstate beer volumes (excluding Birell)
  are forecast to increase by 21%, with South Australian/Northern Territory (including Birell) and export
  volumes forecast to increase by 10% and 14% respectively.
• EBITDA is forecast to increase by 20.7% to $31.6 million, and EBITDA margin is forecast to increase to
  21.6% from 20.7%.
• NPAT is forecast to increase by 26.2% to $18.0 million.
• The Board expects to pay total dividends of at least $6.00 per Share.
The strong increase in revenue forecast in 2006 is supported by the significant growth in interstate beer sales
reported by the Company in the first quarter ended September 2005, with growth of over 42% in Victoria and
NSW and 57% in Western Australia compared to the same period in the previous year.




                                                                                                           37
 PART B - 7. Financial performance


 7.1. Financial Highlights

                                                                                                                     (%)
                                                                                                                     (%)
                                                    146.0
                                                    146.0                                                       21.6%
                                                                                                                21.6%
                                                                                             20.7%
                                                                                             20.7%
                                                                                  17.3%
                                                                                  17.3%
                              126.6
                              126.6                                                                               31.6
                                                                                                                  31.6

                                                                                                 26.2
                                                                                                 26.2
             107.0
             107.0
                                                                                   18.5
                                                                                   18.5




         0                                                                    0
         0                                                                    0

                     Financial year ended 30 June                                         Financial year ended 30 June
                     Financial year ended 30 June                                         Financial year ended 30 June




NPAT ($m)
NPAT ($m)                  ($m)
                           ($m)


                                                     18.0
                                                     18.0                                                                    600
                                                                                                                             600



                                14.3
                                14.3                                                                     405
                                                                                                         405
                                                              (c per Share)
                                                            (c per Share)




             9.4
             9.4                                                                      195
                                                                                      195




     0
     0

                     Financial year ended 30 June                                             Financial year ended 30 June
                     Financial year ended 30 June                                             Financial year ended 30 June




38
   PART B - 7. Financial performance


   7.2. Introduction and basis of preparation

The financial information in this section comprises:
• Summary consolidated statements of financial performance, financial position and cashflow for the years
  ended 30 June 2004 and 30 June 2005 (the Historical Financial Information); and
• Directors’ Forecasts of financial performance for the year ending 30 June 2006 including supporting
  assumptions on which the forecasts are based (the Directors’ Forecasts).
The financial information is presented in an abbreviated form and does not contain all the disclosures that
are usually provided in an Annual Report prepared in accordance with Australian Accounting Standards.
The financial information should be read in conjunction with, and by reference to the Independent
Accountant’s Report contained in appendix 2 and other information in this Target’s Statement.
The financial information has been prepared in accordance with the recognition and measurement principles
prescribed in Australian Accounting Standards and other mandatory professional reporting requirements in
Australia. The Historical Financial Information has been derived from Coopers’ audited financial statements
for the years ended 30 June 2004 and 30 June 2005. The statement of financial performance has been
presented on a normalised basis to promote comparability within the Historical Financial Information and
between the Historical Financial Information and the Directors’ Forecasts. The normalisation adjustments
have been itemised and disclosed in the notes accompanying the statement of financial performance.
The Directors’ Forecasts have been prepared by management on the basis of Coopers’ budget for the year
ending 30 June 2006 and adopted by the Board. The Directors’ Forecasts have been independently reviewed
by Ernst & Young. Ernst & Young’s Independent Accountant’s Report is contained in appendix 2.
The Directors’ Forecasts are based on various assumptions relating to the forecast period, many of which are
outside the control of Coopers and the Board. While the Directors’ Forecasts are considered appropriate and
reasonable at this point in time, events and circumstances often do not occur as expected. Therefore, actual
results may differ from the Directors' Forecasts and these differences may be material. Accordingly, the
Directors cannot and do not guarantee that the Directors' Forecasts will be achieved.
The Forecasts have been prepared in accordance with Australian Generally Accepted Accounting Principles
(AGAAP) and are presented in accordance with AGAAP.




                                                                                                        39
      PART B - 7. Financial performance


      7.3. Financial Information


    Financial year ended 30 June                                                     2004              2005               2006F               CAGR
                                                                                       $m                $m                  $m            2004-2006
                                                                                                                                                 (%)
    Total beer volume, including Birell (million litres)                              38.4               44.9               51.1                 15.4%

    Revenue from sale of goods                                                      107.0              126.6               146.0                 16.8%
       Revenue growth                                                                                 18.4%               15.3%
    EBITDA                                                                           18.5               26.2                31.6                 30.7%
       EBITDA margin                                                               17.3%              20.7%               21.6%
     Depreciation                                                                   (4.0)               (4.4)               (4.6)
    EBITA                                                                            14.5               21.8                27.0                 36.6%
       EBITA margin                                                                13.5%              17.2%               18.5%
     Amortisation                                                                   (0.1)               (0.1)               (0.1)
    EBIT                                                                             14.4               21.7                26.9                 36.8%
       EBIT margin                                                                 13.4%              17.1%               18.4%
     Interest expense                                                               (0.8)               (0.7)               (0.5)
    PBT                                                                              13.5               21.0                26.4                 39.7%
     Tax                                                                            (4.0)               (6.4)               (8.0)
       Effective tax rate                                                          29.8%              30.3%               30.3%
    NPAT                                                                              9.5               14.6                18.4                 39.2%
     Outside equity interests                                                       (0.1)               (0.4)               (0.4)
    NPAT attributable to members                                                      9.4               14.3                18.0                 38.4%
    NPAT attributable to members, reported                                            9.5               14.3                18.0                 37.7%

    Dividend per Share ($)                                                            1.95               4.05               6.00                 75.4%




Notes:
•     Represents the consolidated statements of financial performance of Coopers for the years ended 30 June 2004 and 30 June 2005 and the Directors’
      Forecasts for the year ending 30 June 2006.
•     The consolidated statements of financial performance for the year ended 30 June 2004 and the year ended 30 June 2005 have been prepared under
      AGAAP.
•     The actual and forecast summary consolidated statements of financial performance are presented in an abbreviated form in so far as they do not include
      all the disclosure requirements of the Australian Accounting Standards. The consolidated statements of financial performance should be read in
      conjunction with the summary of the normalisation adjustments made and described below.
•     Revenue from sale of goods is shown as reported in Coopers’ annual reports and relates to sale of goods from operating activities. Revenue is shown net
      of invoice discounts, sales excise duty and bottle collection levy.
•     Costs in the range of $5 million - $7 million associated with the preparation of the Target’s Statement and responding to Lion Nathan’s Offer and
      associated legal proceedings have not been included in the Directors’ Forecasts. These costs will impact the reported financial results for the year ending
      30 June 2006.
•     Numbers may not add due to rounding.




40
   PART B - 7. Financial performance


   7.3. Financial Information

Review of 2005 performance
Coopers reported continuing strong performance in the 2005 financial year. Revenue for the year from sale
of goods was a record $126.6m, an increase of 18.4% over the previous financial year and NPAT increased by
51.8% over the previous financial year.
• The improvement in sales revenue (and gross sales margin) in the 2005 financial year from the prior
  period was driven by the following key factors:
   -   continued volume growth. South Australian sales increased by 7% with interstate sales growing
       between 26% and 57% over the 2004 financial year. Distributions through Premium Beverages
       increased by 37% over the 2004 financial year with strong growth in key national accounts; and
   -   improvement in beer sales prices, with price increases in August 2004 and February 2005.
• The improvement in EBITDA margin was the result of:
   -   a continued shift in product mix towards beer sales, which now comprise 78% of Coopers’ total sales
       revenue (2004: 73%);
   -   increase in manufacturing activity, resulting in volume driven production cost efficiencies;
   -   continued improvement in beer sales prices; and
   -   lower average malted barley prices for the year.




                                                                                                      41
   PART B - 7. Financial performance

                                                                                        2004         2005
                                                                                          $m           $m
                                                                                        2004         2005
  Total current assets                                                                  26.0
                                                                                          $m          34.5
                                                                                                       $m
  Total non-current assets                                                              55.6          63.9
  Total current assets
  Total current liabilities                                                              26.0
                                                                                        18.7          34.5
                                                                                                      22.7
  Total non-current assets
  Total non-current liabilities                                                          55.6
                                                                                          5.9         63.9
                                                                                                       7.2
  Total current
  Net assets liabilities                                                                 18.7
                                                                                        56.9          22.7
                                                                                                      68.6
  Total non-current liabilities
  Net debt                                                                                5.9
                                                                                          7.0          7.2
                                                                                                       7.4
  Net assets                                                                             56.9         68.6
  Net debt                                                                                7.0          7.4

Net debt increased from $7.0 million at 30 June 2004 to $7.4 million at 30 June 2005 as a result of the
significant capital expenditure program and the significant build up in finished goods inventory (increase of
$4.9 million) recorded at 30 June 2005 in preparation for the production shutdown during the installation of
the new filler in August 2005.



                                                                                        2004         2005
                                                                                           $m           $m
                                                                                        2004         2005
  Net cash inflows / (outflows) from:                                                      $m           $m
  Operations                                                                             17.0         15.3
  Net cash
  Investing inflows / (outflows) from:                                                  (8.7)       (11.7)
  Operations
  Financing                                                                              17.0
                                                                                       (11.0)          15.3
                                                                                                      (2.3)
  Investing
  Net cash inflows / (outflows)                                                          (8.7)
                                                                                        (2.6)       (11.7)
                                                                                                        1.3
  Financing                                                                            (11.0)         (2.3)
  Net cash inflows / (outflows)                                                          (2.6)          1.3
Key factors impacting the consolidated cash flow statement for the 2005 financial year include:
• The planned build up in finished goods inventory (increase of $4.9 million) in preparation for the August
  2005 new filler installation, which had a negative impact on net cash flows from operating activities.
• Property plant and equipment net additions (both purchased and finance leased) of $11.7 million (key
  asset additions include the can seamer, bottling facility upgrade, warehouse extension, new fermenters, keg
  filler upgrade and the purchase of kegs).




42
   PART B - 7. Financial performance

Overview of Directors’ Forecasts for year ending 30 June 2006
The Directors’ Forecasts show continuing strong growth for the year ending 30 June 2006.
• Revenue forecast to increase by 15.3% to $146.0 million.
• EBITDA forecast to increase by 20.7% to $31.6 million.
• NPAT forecast to increase by 26.2% to $18.0 million.
• Forecast dividends of not less than $6.00 per Share: up at least 48.1% on the 2005 financial year.
Strong volume growth and further market share growth in the growing premium beer market will be driven
by the increasing strength of Premium Beverages’ national distribution platform, continued promotional
programs with key customers and continued brand investment.


Strategic initiatives
Coopers forecast growth is supported by the following key strategic initiatives:
• Continued focus on developing the brand value of Coopers – the ‘Coopers advantage’ drives marketing,
  and hence revenue growth of the Company.
• Focus on the penetration of Coopers’ product outside the South Australian market through the continued
  development and growth of its national distribution and sales subsidiary, Premium Beverages, which was
  established in 2003.
• Continued focus on market share growth in South Australia.
• Increased penetration of the Coopers brand internationally.
• Continued increase in production capacity and exploitation of expansion opportunities at the Regency
  Park brewery.




                                                                                                       43
     PART B - 7. Financial performance

Note 1: Normalisation adjustments
The consolidated statement of financial performance has been presented on a normalised basis by adjusting
for abnormal items, to promote comparability within the historical financial information and between the
historical and forecast financial information. The normalisation adjustments made to 2004 and 2005
financial year results are shown below.

    Normalisation adjustments
                                                                                       2004         2005
                                                                                         $m           $m

    Profit before tax (PBT)                                                             13.5         21.0

    Non-recurring items before tax:
     Net gain / (loss) on sale of assets 1                                             (0.2)         (0.0)
     Auto-Bake sale proceeds                                                             0.4           0.2
    Total Normalisation Adjustments                                                      0.1          0.1

    Profit before tax per statutory accounts                                            13.7         21.1

Notes:
1    2005 Net loss on sale of non-current assets amounts to $0.05 million.




Note 2: Costs incurred as a result of Lion Nathan’s offer
Costs in the range of $5 - $7 million associated with the preparation of the Target’s Statement and responding
to Lion Nathan’s Offer and associated legal proceedings have not been included in the Directors’ Forecasts.
These costs will impact the reported financial results for the year ending 30 June 2006.




44
   PART B - 7. Financial performance


   7.4. Sensitivity analysis of financial information

The Directors’ Forecasts are sensitive to key assumptions used in preparing the Forecasts. The table below sets
out a summary of the potential impacts from changes in actual performance.
Care should be taken in interpreting the sensitivity analysis. The sensitivity analysis treats each change in
specific assumption in isolation from the others, where in many cases changes may be interdependent, with
changes having associated cumulative or offsetting impacts. The analysis presented is no indication of the likely
level of variation that could occur in relation to each assumption. Proportional variations of the changes may
not result in a proportional change to the forecast impact.

 Sensitivty analysis - impact on forecast NPAT ($m)
                                                                                     Sensitivity     Impact
                                                                                                      2006F

  Total beer volume                                                                       ± 1%         ± 0.3
  All products volume                                                                     ± 1%         ± 0.4
  Total beer price change                                                                 ± 1%         ± 0.8
  All products price change                                                               ± 1%         ± 0.9
                                                                                                       ±
  Advertising, marketing and promotion expenses                                           ± 1%           0.2




                                                                                                               45
   PART B - 7. Financial performance


   7.5. Impact of adopting AIFRS

International Financial Reporting Standards
For reporting periods beginning on or after 1 January 2005, Coopers and its controlled entities must comply with
Australian equivalent to International Financial Reporting Standards (“AIFRS”) as issued by the Australian
Accounting Standards Board.
First time application of AIFRS by Coopers will be for the financial year ending 30 June 2006 (and including
prior period comparatives).
Coopers management team is assessing the significance of these changes and is preparing for their
implementation. Coopers has engaged a team of external consultants to assist with its conversion to AIFRS.
The project has achieved its scheduled milestones to date and Coopers expects to be in a position to fully
comply with AIFRS requirements for the year ending 30 June 2006.
The historical and forecast financial information as presented in this Target’s Statement of Coopers is prepared
in accordance with the measurement and recognition requirements, but not all of the disclosure requirements
of current Australian Accounting Standards and the mandatory financial reporting requirements in Australia
(“AGAAP”), which differ in certain material respects from IFRS.
Set out below are the key areas where accounting policies are expected to change on adoption of AIFRS and
the Directors’ best estimate of quantitative impact of the changes on total equity as at the date of transition and
30 June 2005, and on the net profit for the year ending 30 June 2006. The Directors may, at any time until the
completion of Coopers’ first AIFRS compliant financial report, elect to revisit, and where considered necessary,
revise the accounting policies applied in preparing the Statement of Financial Position and Statement of
Financial Performance arising from the voluntary exemptions contained in AASB 1. Accordingly, the opening
Statement of Financial Position prepared as part of Coopers’ first AIFRS compliant financial report may differ
from the information included in this Target’s Statement.
The figures disclosed below are management’s best estimates of the quantitative impact of the changes as at the
date of preparing the 30 June 2005 financial report. The actual effects of transition to AIFRS may differ from
the estimates disclosed due to:
• ongoing work being undertaken by the AIFRS project teams;
• potential amendments to AIFRS and Interpretations thereof being issued by the standard setters and IFRIC;
  and
• emerging accepted practice in the interpretation and application of AIFRS and UIG Interpretations.
Coopers currently expects that the most significant impacts will be in the areas described below. This summary
should not be construed as being exhaustive. Additionally, no attempt has been made to identify, in this
document, all the disclosure, presentation or classification differences that would affect the manner in which
transactions and events are presented in the Relevant Financial Information.




46
   PART B - 7. Financial performance

First-Time Adoption
On first-time adoption of AIFRS, Coopers will be required to restate its comparative balance sheet to comply
with the requirements of AIFRS. As a result, the balance sheet as at 30 June 2005 that will be presented in the
financial report for the year ending 30 June 2006 will not be the same as the balance sheet presented in the
financial report for the year ended 30 June 2005, which would have been prepared under AGAAP.
On first-time adoption various exemptions are available, which are not available on an ongoing basis. However,
these exemptions will provide relief from retrospectively accounting for certain balances, instruments and
transactions in line with AIFRS, discussed further below.

Business Combinations – Transitional Elections
AASB 1 “First-time Adoption of Australian Equivalents to International Financial Reporting Standards” provides an
exemption for business combinations. That is, an entity may elect not to apply AASB 3 retrospectively to past
business combinations (business combinations that occurred before the date of transition to AIFRS).
Coopers currently intends to elect to utilise the exemption under AASB 1 for all past business combinations
(that is, elect not to apply AASB 3 retrospectively).

Impairment of assets
Under AASB 136 “Impairment of Assets”, the recoverable amount of an asset is determined as the higher of its
net selling price and value in use. The Company’s current accounting policy is to determine the recoverable
amount of an asset on the basis of discounted cash flows. The Company’s assets including goodwill have been
reviewed for impairment on transition and 30 June 2005 as part of the cash generating unit to which they
belong, and have not identified any indicators of impairment which would result in any material impairment
losses being recognised under AIFRS at transition and as at 30 June 2005.

Goodwill
Goodwill is currently amortised by Coopers on a straight-line basis over a period of 20 years. Under AASB 3,
Business Combinations, goodwill will not be amortised but will be subject to a rigorous impairment test focusing
on the cash flows of the related cash-generating units. Coopers will be required to test the carrying values
attributed to goodwill for impairment at least annually, or whenever there is indication goodwill may be
impaired. Impairment testing will require an identification of appropriate cash generating units, the allocation
of goodwill to those units and the ability to determine reliable estimates of the future cash flows that those units
will generate.
The goodwill held by Coopers was generated on the acquisition of the Company’s subsidiaries generating
goodwill of $1.82m, which as at 30 June 2004 had been amortised to a net figure of $1.55m. The elimination
of goodwill amortisation will increase net earnings for the 12 months to 30 June 2005 by $0.09m, and increase
intangible assets at 30 June 2005 by $0.09m.




                                                                                                                47
   PART B - 7. Financial performance

In respect of the forecast financial information provided in section 7.3, goodwill has been further amortised by
$0.09m so as to show a consistent basis of presentation in accordance with AGAAP. Under AIFRS this
amortisation expense will not be incurred and earnings before tax and after tax will be correspondingly higher.
The Directors have reviewed the operations to which the goodwill relates and have not identified any indicators
of impairment which would result in any material impairment losses being recognised under AIFRS at transition
as at 30 June 2005. Reduction in future earnings may result in the event of any impairment identified in future
annual testing.

Financial Instruments
Under AGAAP where derivative financial instruments are held as cash flow hedges for future expected
transactions, resultant gains or losses on those hedges are permitted to be recognised in and brought to account
in the period when the underlying transactions take place. Under AIFRS gains or losses arising from derivative
financial instruments are only permitted to be classified as hedges where they meet stringent designation,
documentation and effectiveness tests. If these tests are met then gains or losses are reflected directly in equity
and brought to account as a profit or loss in the period when the underlying transaction takes place.
Management has elected to apply the exemption provided in AASB 1, which permits entities not to apply the
requirements of AASB 132 “Financial Instruments: Presentation and Disclosures” and AASB 139 “Financial
Instruments: Recognition and Measurement” for the financial year ended 30 June 2005. The standards will be
applied from 1 July 2005. Management are of the opinion that no cash flow hedges on foreign exchange
contacts have been entered into as at 30 June 2005 that would materially effect the net assets of the Company
as at that date.

Income Tax
AGAAP utilises the statement of financial performance approach in calculating tax balances. AIFRS however
utilises a balance sheet approach to the calculation of tax balances. Under this approach deferred tax balances
are recognised where there is a difference between the carrying value of assets and liabilities for accounting
purposes and their tax bases.
Management has considered the impact of adoption of AASB 112 and has determined that no material AIFRS
adjustment will arise.

Embedded derivatives
Under AASB 139 “Financial Instruments: Recognition and Measurement”, an embedded derivative shall be
separated from the host contract and accounted for as a derivative if:
a) the economic characteristics and risks of the embedded derivative are not closely related to the economic
   characteristics and risks of the host contract,
b) a separate instrument with the same terms as the embedded derivative would meet the definition of a
   derivative; and
c) the combined instrument is not measured at fair value with changes in fair value recognised in profit or loss.
Management have reviewed the contracts they have outstanding as at 30 June 2005 and concluded that there
are no material embedded derivatives within the group that require recognition under AASB 139.




48
   PART B - 7. Financial performance

Employee benefits
The Company contributes to a number of defined contribution superannuation plans, and a target scheme for
a limited number of long standing employees. It is still being ascertained as to whether the scheme could be
defined under AIFRS as a defined benefit or defined contribution arrangement. Once this has been established,
and if required, the Company will engage an actuary to assess its obligations under the superannuation structure,
the results of which will be known for inclusion within the 30 June 2006 financial statements. The last actuarial
valuation that was undertaken on the targeted scheme was performed in December 2003 and indicated the
present value of the additional contributions required was approximately $1.4 million. The Company has since
been, and is projected to be, contributing at the higher amount recommended by the actuary.

Provisions for doubtful debts
AASB 139 requires Companies to raise an impairment loss for the difference between the asset’s carrying
amount and the present value of expected future cash flows. As such, any portion of a provision for doubtful
debts which represents a general provision that cannot be supported will be required to be derecognised with a
corresponding adjustment to opening retained earnings.
Directors have assessed the financial statements and decided that at the transition date provisions totalling $1.3
million are not allowable under AASB 139. The elimination of these provisions and the amounts charged to
the statement of financial performance in respect of them will result in a decrease to net earnings of $0.5 million
for the 12 months ended 30 June 2005, and an increase to total equity of $0.6 million as at 30 June 2005
(including the tax effect of the adjustment).

Borrowing costs
Under AASB 123 “Borrowing costs”, borrowing costs on “qualifying” assets can be expensed or capitalised.
As part of the process of constructing Regency Park in 2001, Coopers incurred borrowing costs of $0.8 million
which have been capitalised under Australian GAAP and are being amortised over a 20 year period. At present
the Directors have elected that under AIFRS, the Company will not change its accounting policy and as such
the remaining net book value of $0.7 million at the transition date will remain capitalised and continue to be
amortised over the remaining useful economic life of the assets to which it relates.

Revaluation of fixed assets
Under AASB 116 “Property, Plant & Equipment” an entity may revalue certain pools of assets at fair value
provided the fair value can be measured reliably, and that updates to this value are performed sufficiently
regularly to ensure that the carrying amount does not differ materially from that which would be determined
using fair value at the reporting date.
The Directors have, at present, elected not to re-value freehold land and buildings, and are currently
maintaining the value of these assets at cost less accumulated depreciation (on the buildings only) of $19.6
million (net) as at 30 June 2004. Directors have obtained an external valuation for the land and buildings as at
30 June 2004 totalling $25.7 million. If a policy of re-valuation were to be adopted the land and buildings would
be restated to $25.7 million, and the net assets of the group would increase by $4.3 million (including the tax
effect of the revaluation). The revaluation would also increase the annual depreciation charge being debited to
the profit and loss account under AIFRS.

                                                                                                               49
   PART B - 7. Financial performance

Remediation costs of Regency Park
AASB 137 “Provisions, Contingent Liabilities and Contingent Assets” requires the rehabilitation, restoration and
decommissioning obligations associated with the retirement or disposal of assets to be recognised when the
disturbance and obligation occurs. The provision is measured at the present value of the future expenditure and
a corresponding asset is also recognised under AASB 116 “Property, Plant and Equipment”. The capitalised cost
is amortised over the life of the project and a provision is increased as further disturbance occurs which creates
a further obligation to rehabilitate. Associated discounting of the liability unwinds throughout the life of the
provision; with this unwind being recognised as an interest expense.
Directors have considered potential remediation and rehabilitation costs applicable to the operations at
Regency park and conclude that the present value of any amounts payable at the end of the brewery life would
be insignificant. As a result, any potential AIFRS adjustment is not material as at 30 June 2005.

Property, Plant and Equipment
AASB 116 requires that where assets comprise two or more components, with different useful lives, then each
component should be accounted for separately. In addition the standard also requires management to reassess,
at each reporting date, the residual values of the assets based on current market rates.
Directors have reviewed the fixed asset base within the group and have concluded that property, plant and
equipment has been appropriately componentised, and that any further separation of assets into their
components will not lead to a material change in the depreciation expense for the 12 months ended 30 June
2005, nor in a material impact to the net assets as at 30 June 2005.
Management has also reassessed the residual values of the fixed assets held within the group as at 30 June 2004
and 30 June 2005 and has concluded that the residual values of the assets are not materially different to those
already being used within the group. As a result, any potential AIFRS adjustment is not material as at 30 June
2005.




50
   PART B - 7. Financial performance


   7.6. Assumptions

General assumptions
The general assumptions outlined in this section have been adopted in preparing the Directors’ Forecasts.

Accounting standards
To facilitate comparison with prior years, the Directors’ Forecasts have been prepared and presented in
accordance with AGAAP. As set out in Section 7.5. Coopers’ results for the financial year ending 30 June 2006
will be presented in accordance with AIFRS.

Legislation
No change in Federal, state or local government laws, regulations or policies in the jurisdictions Coopers
operates that will have a material impact on the performance or financial position of Coopers.

Litigation
There are currently various litigation cases involving Coopers. The Directors’ Forecasts have not taken into
consideration any potential liability, contingent or otherwise, from these or any future proceedings, or the costs
incurred with representation in these or any future proceedings.

Economic and political environment
Coopers’ business may be affected by general economic conditions, interest rates and inflation. Changes in
economic conditions under which Coopers operates may result in customers changing spending patterns or their
level of consumption, which may in turn have a material adverse impact upon Coopers’ operating and financial
performance.
The Directors’ Forecasts assume no material adverse changes in the prevailing economic and political
conditions in the jurisdictions in which Coopers operates.

Continuity of operations
No material adverse change in the prevailing operations within Coopers during the financial year ending 30
June 2006, including no material acquisitions or divestitures of businesses and no loss of key personnel.




                                                                                                              51
   PART B - 7. Financial performance


   7.6. Assumptions

Specific assumptions
In addition to the general assumptions set out above and in previous sections, the following specific assumptions
have been adopted in preparing the Directors’ Forecasts.

Sales price increases
Price increases have been assumed for beer products. This includes price increases that took effect in August
2005, and a further increase is forecast for February 2006. Price increases have also been assumed for malt
extract. No material price changes have been assumed for home brew products.

Operating expenditure
Operating expenditure has been based upon historic operating expenditure, adjusted for expected increases in
production volumes and anticipated inflationary increases to costs and wages.

Raw material prices
Key raw material costs have been based on existing contractual arrangements and expected production
volumes. Key raw material contracts for bottles, malt and cartons are renegotiated or reset on an annual basis
in August, April and July respectively. No price increases have been assumed for these products from their
current prices. Non-contracted raw material costs have generally been assumed to increase by a relevant
inflationary factor.

Interest expense
Interest expense has been forecast based on market interest rates remaining at current levels.

Buy-Back
The impact of the proposed Share Buy-Back of up to 15% of issued capital at $260 per share has not been
included in the Directors’ Forecasts.
For an assessment of the impact of the Share Buy-Back on the financial position of Coopers, please refer to the
Buy-Back documentation.

Income Tax
Forecast income tax expense is based on the prevailing corporate tax rate, adjusted for an expected permanent
difference relating to entertainment expenses.

Costs incurred as a result of Lion Nathan’s Offer
Costs in the range of $5-$7 million associated with the preparation of the Target’s Statement and responding to
Lion Nathan’s Offer and associated legal proceedings have not been included in the Directors’ Forecasts.




52
   PART B - 7. Financial performance


   7.7. Risk factors

Risk Analysis
An investment in Coopers’ Shares is subject to risks affecting companies generally and other risks which affect
Coopers in particular. Some of these risks can be mitigated by the use of appropriate safeguards, systems and
controls. Others are outside of Coopers’ control and cannot be mitigated. The following risks have been
identified in connection with an investment in Coopers’ Shares. You should carefully consider these risks
together with all the other information included in this Target’s Statement before making any decision in
relation to your Shares. You may also wish to discuss these risks with your investment or other professional
adviser.


General & Economic Risks
Economic conditions
The performance of Coopers may be influenced by the general condition of the Australian economy. Changes
in interest rates, employment rates, exchange rates, inflation, consumer spending and government fiscal,
monetary and regulatory policies may affect sales and operating profits. In particular, adverse economic
conditions could have an unfavourable impact on the sale of premium beers in Australia (which account for
39% percent of Coopers’ volume sales in the Directors' Forecasts). In contrast, adverse economic conditions
could have a favourable impact on the sales of home brew products in Australia, as consumers turn to more
economical sources of beer.

Hostilities, acts of terrorism and politics
War or problematic trade or international relations may affect the ability of Coopers to meet the Directors’
Forecasts. Whilst Coopers is forecast to only generate 861,930 litres or 1.7% of total sales volume in export sales
in the year ending 30 June 2006, acts of terrorism or an outbreak of international hostilities could adversely
affect Australian consumer confidence and customer spending. This could adversely affect sales of Coopers’
products, which would have a negative impact on Coopers’ operating performance.

Tax and Duty
Changes in relevant taxes may adversely affect the financial performance of Coopers.
Any changes to the current rate of excise duty applied to beer may affect sales and operating profits. Coopers’
management have a pricing policy of passing all increases in excise directly through to the consumer, although
an unexpected and material increase in excise duties could adversely impact Coopers’ forecast sales volume.




                                                                                                               53
   PART B - 7. Financial performance

Any change to the current rate of company tax will impact on Shareholder returns both in terms of profits that
Coopers is able to distribute as dividends and the level of franking credits available on those dividends. Any
change to the current rates of income tax applying to individuals and trusts will similarly impact on Shareholder
returns.

Change in accounting or financial reporting standards
Australian accounting standards are set by the Australian Accounting Standards Board (AASB) and are outside
the Directors’ and Coopers’ control. Changes to accounting standards issued by AASB could materially adversely
impact the financial performance and position reported in Coopers’ financial statements.

Legal and regulatory changes
Legislative or regulatory changes, particularly regulatory changes in relation to the consumption or excise duty
payable on alcoholic beverages or environmental (in respect of Coopers’ ability to draw water from the natural
water reserves beneath Regency Park, South Australia) could have an adverse impact on Coopers’ financial
performance.


Specific Key Business Risks
In addition to the general risks set out in Section 7.1, the business activities of Coopers are subject to a number of
specific risks that could affect Coopers and the industry in which it operates. These factors may substantially
impact on its future performance, as follows:

Competition
The Australian beer industry has experienced recent consolidation and today two major players, Foster’s Group
Limited and Lion Nathan hold substantial market share in Australia. The industry is highly competitive with a
trend of increasing promotional expenditure and pricing pressures. In addition, it is possible that Lion Nathan or
Foster’s Group Limited could undertake a period of exceptionally aggressive pricing (including through discounts
and rebates) which could adversely impact Coopers' domestic sales.

Reliance on key customers
Coopers’ key customers include national retailers, namely Woolworths Ltd (Dan Murphy’s, BWS, Woolworths
Liquor, Cheaper Liquor and Safeway Liquor Stores) and Coles Myer Ltd (Liquorland, Vintage Cellars and First
Choice Liquor Superstores), a large number of independent buying groups (such as Sip’n Save and the Booze
Brothers), wholesalers (who supply restaurants and bars) and hotels / hotel groups. In addition Coopers sells to
Premium Beverages (for sales outside South Australia and the Northern Territory) who sells to Woolworths Ltd
stores, Coles Myer Ltd stores and seven liquor wholesalers.




54
   PART B - 7. Financial performance

The retail beer industry has experienced significant consolidation in the last 12 to 24 months. This has resulted in
the number of overall customers decreasing, with greater concentration of sales being made to the major national
retailers. This increased market share has resulted in greater reliance on these key customers.

Reliance on key suppliers
The major raw materials for the production of beer are:
• Malted barley
• Unmalted cereals and sugar
• Hops
• Bottles
• Cans, crown seals and labels
• Cartons and other packaging
• Gas and electricity
• Water
Any changes to the terms of trade with suppliers, particularly pricing, or any shortage of supply, or disruption to
supply, of key raw materials or other ingredients or inputs may adversely affect Coopers’ operating and financial
performance. Coopers’ contract with ACI Operations Pty Ltd (ACI) provides for the delivery of glass beer bottles
to Coopers on a daily just in time basis. The possibility of supply being delayed represents a risk to Coopers and
exposes its reliance on ACI’s supply (although both Lion Nathan and Foster's Group Limited are subject to the
same risk in respect of their own domestic production). The pricing of the supply of barley also has a significant
impact on Coopers’ beer margins.
When supply contracts expire or terminate, there is no assurance that Coopers will be able to negotiate new supply
contracts on terms which are as advantageous as those currently enjoyed.

Seasonal / Climatic conditions across Australia
The beer industry is affected by weather conditions with warmer weather usually associated with increased beer
consumption. The beer industry is seasonal with the seasons of Spring and Autumn and particularly Summer being
the seasons which experience the highest volume of sales. Coopers is forecasting 27% of its total beer sales in
Summer, compared with 26% in Spring and 25% in Autumn for the year ending 30 June 2006.




                                                                                                                55
   PART B - 7. Financial performance

Disruption of business operation
Coopers is exposed to a range of operational risks relating to both current and future operations. Such operational
risks include equipment failures, failures at the Regency Park brewery, IT system failures, loss of gas supply during
a power failure, external services failure, industrial action or disputes and natural disasters. While Coopers
endeavours to take appropriate action to mitigate these operational risks or insure against them, if one or more
operational risks materialise, they may have a material adverse impact on the performance of Coopers.

Occupational health and safety
In common with all manufacturing companies, Coopers faces the risk of workplace injuries which may result in
workers’ compensation claims, related common law claims and potential occupational health and safety
prosecutions.
While Coopers believes that appropriate safeguards have been put in place, its production processes could result
in serious injury to employees or other persons and give rise to liability under occupational health and safety laws
and regulations and also under the general law. Coopers holds safety in the highest regard and the design of the
Regency Park brewery incorporated features to mitigate the risk of workplace injuries.

Reliance on key personnel
Coopers’ operations are dependent on a stable workforce and the continued performance, efforts, abilities and
expertise of its key technical and management personnel, in particular Tim and Glenn Cooper, the senior
management team, the brewing team, the factory / filling team and the sales team. The Directors note that
Coopers has only 108 staff which highlights the reliance on a discrete number of personnel. The loss of key
personnel or the inability to recruit or retain high calibre staff may adversely affect Coopers’ growth prospects and
earnings.
Coopers has historically enjoyed low turnover amongst its senior executives. Additionally the family connection
and equity interests of Tim and Glenn Cooper align their interests with Coopers’ future performance. The risk of
loss to brewing knowledge as a result of key personnel turnover is partially mitigated by a nine member brewing
team which includes six qualified brewers.

Product liability
Coopers follows quality assurance procedures in relation to the manufacture and supply of its products. Coopers
has adopted the principles of quality management of AS/NZS ISO 9001:2000 to which it has been accredited for
a number of years. This incorporates an accredited food safety program, incorporating Hazard Analysis and Critical
Control Points (HACCP) together with requisite recall procedures. Coopers is also accredited by many vendors,
including Kraft, Masterfoods and the Woolworths Quality Assurance program (WQA).




56
   PART B - 7. Financial performance

Industrial disputes
There is a risk of industrial disputes arising from claims for higher wages or better conditions which could disrupt
Coopers’ business and give rise to loss of earnings.
Most of Coopers’ employees are covered by enterprise bargaining agreements, which periodically come up for
renegotiation and renewal. The renegotiation of these agreements on their expiry may result in industrial
disputation and strikes and/or future wage and remuneration increases. This could disrupt Coopers’ operations and
have a material impact on the costs, cash flows and financial performance of Coopers. The existing enterprise
bargaining agreement is due for renegotiation in mid June 2006.

Taxation
Coopers has identified a potential GST liability relating to bulk malt extract sales during the period 1 July 2000
to 1 April 2004, which were treated as GST - free supplies. The issue is currently being assessed by the ATO. If
the ATO issues assessments to Coopers for GST on past bulk malt supplies, the likely impact will be a possible
GST liability of $206,000. Coopers may be able to claim any amounts of GST from its customers because those
customers will be entitled to input tax credits for the GST they pay. However, Coopers terms of trade may not
provide an automatic right to reclaim the GST amount. Coopers may also be liable for a general interest charge
in relation to this GST liability. The maximum interest expense is estimated at around $95,000.

Insurance
Coopers has insurance which the Directors believe to be commensurate with industry standards and adequate,
having regard to the business activities of Coopers.

Reliance on key items of plant and equipment
Coopers relies on certain items of plant and equipment to undertake the manufacturing process. The level of plant
and equipment productivity, availability, obsolescence, the effectiveness of plant and equipment maintenance,
new plant and equipment performance and unexpected mechanical failure or breakdown may affect contract
performance and profitability.
Coopers’ Regency Park facilities were commissioned in November 2001 and remain state of the art. The age of
Coopers’ plant, the condition and maintenance of the facility and the ongoing capital expenditure all help
mitigate this risk.




                                                                                                                57
   PART B - 7. Financial performance

Capital expenditure
The Directors’ Forecasts are based on certain assumptions in relation to the level of capital expenditure required
to maintain its operations. If the level of capital expenditure required is higher than Directors’ Forecasts, is
needed sooner than expected, if capital expenditure required to generate forecast earnings is not undertaken or
if there is a significant operational failure requiring capital expenditure, the financial performance of Coopers
may be adversely affected.
Capital expenditure for the year ending 30 June 2006 is forecast to be $9.0 million.

Currency and exchange rate fluctuations
Due to the geographic split of Coopers’ revenues, your Directors do not believe that currency and exchange
rate fluctuations would have a material impact on the Directors’ Forecasts.
As a result, Coopers’ management has not undertaken any measures to reduce foreign currency risk.
Premium Beverages’ foreign exchange exposure has been hedged using a buy order forward contract for
US$150,000 at a rate of $0.76 which expires in mid November 2005. Premium Beverages’ management will
consider extending the hedge closer to mid November 2005. Premium Beverages will be exposed to
fluctuations in foreign currency after mid November 2005 should its management decide not to enter into a
new hedge facility.

Fuel and freight cost
Increases in fuel or freight costs may increase Coopers’ operating costs (in particular distribution costs) and
thereby adversely affect Coopers’ operating and financial performance. At the time that the assumptions
were prepared in May 2005 the retail fuel price in South Australia was 105.9 cents per litre. The price of
fuel has since increased and by August 2005 the retail fuel price in South Australia was 119.6 cents per litre.
Management has indicated that despite this increase, no material change in freight costs are expected.

Environmental
Coopers’ compliance with environmental laws is regulated by the Environment Protection Authority (SA)
(EPA). There are a number of environmental impacts caused by Coopers’ Regency Park plant and Coopers
involved the EPA during the development and construction of the brewery to ensure compliance. Coopers
has installed equipment to ensure that odour emissions from the brewhouse are compliant with the EPA’s
requirements. Coopers has a licence to discharge salt water into the marine environment through a pipeline
from the brewery.
In 2002, Coopers discharged saline retentate (from reverse osmosis) into the existing bores at Regency Park.
The EPA holds a bank guarantee for $300,000 pending complete remediation of the site. Coopers has
completed remediation to the satisfaction of the EPA's advisers, and anticipates that this guarantee will be
released without any further remediation work being required.




58
   PART B - 8. Do you want to acquire more Coopers’ Shares?

You may be able to acquire more Shares as a result of Lion Nathan’s Offer.
Shares offered to Lion Nathan will be subject to the Pre-Emptive Rights Regime which requires your
Directors to attempt to find buyers for the Shares from among existing Shareholders and Member’s Relatives.
At your option, you may elect to purchase any available Shares offered to you at the price fixed by their seller
or at their fair value as determined by the Coopers auditor.


How to register your interest
Complete the Registration of Interest form which was sent out with this Target’s Statement and return it to
Haydn Duffield (see the form for his details).
Your name and contact details and those of any Member’s Relatives you nominate will be included on a list
maintained by your Directors for the purpose of identifying potential buyers of Shares that become available
for purchase under the Pre-Emptive Rights Regime.
Refer to section 11 for more information concerning the Pre-Emptive Rights Regime.
Please note that by registering your interest you are not offering to purchase any Shares and your Directors
are not undertaking to offer you the opportunity to purchase any Shares.




Rob Murray, CEO of Lion Nathan said:
“We expect any holding [in Coopers] will be a good
investment in its own right”.
Source: Lion Nathan media release, 1 September 2005.

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60
PART C


9.   Summary of information for Shareholders


10. Lion Nathan’s Offer


11. Pre-Emptive Rights Regime


12. Requisitioned EGM


13. Buy-Back EGM


14. Buy-Back details




                                               61
   PART C - 9. Summary of Information for Shareholders


As a Shareholder you will have recently received:
• Lion Nathan’s Bidder’s Statement
     describing the terms of Lion Nathan’s Offer.
• This Target’s Statement
     containing information regarding Lion Nathan’s Offer and the reasons why your Directors (except David
     Kingston, who has a conflict of interest and is therefore unable to make a recommendation) recommend you
     REJECT the Offer.
     You should read this Target’s Statement and the Bidder’s Statement in full before deciding whether to
     REJECT Lion Nathan’s Offer.
     Further details about the Offer are included in sections 10 and 11. In particular, section 11 contains a
     description of the Pre-emptive Rights Regime and how it applies in the context of the Offer.
• Notice of Buy-Back EGM
     convening an extraordinary general meeting of Shareholders to consider and, if thought fit, approve a
     special resolution to amend the Coopers Constitution to exempt the Buy-Back from the Pre-Emptive Rights
     Regime and an ordinary resolution approving the Buy-Back.
     The Buy-Back EGM is to be held at 10.30am on Wednesday, 7 December 2005 at 461 South Road, Regency
     Park, South Australia. Shareholders should read the Notice of Buy-Back EGM in full before deciding
     whether to vote to approve these resolutions.
     Further details about the Buy-Back EGM are included in section 13.
• Buy-Back Documents
   containing details of an Offer by Coopers to buy-back some or all your Shares for $260 per Share (subject
   to an overall limit of 15% of issued Shares). If you wish to participate in the Buy-Back you must complete
   the Buy-Back acceptance form and return it to the Company no later than 5.00pm on Friday, 16 December
   2005 (unless that time is extended by your Board).
   You should read the Buy-Back Documents in full before deciding whether to participate in the Buy-Back.
   Further details about the Buy-Back are included in section 14.
Subject to the decision of the Federal Court, you will shortly receive:
• Notice of Requisitioned EGM
     convening an extraordinary general meeting of Shareholders to consider and, if thought fit, approve a
     special resolution to amend the Coopers Constitution by removing references to Lion Nathan, including its
     third tier pre-emptive right and a provision which deems it not to be a competitor of Coopers.
     On 11 October 2005, the Federal Court granted an injunction restraining the holding of the Requisitioned
     EGM but gave liberty to Coopers to apply to discharge the injunction upon 24 hours’ notice. On 8
     November 2005, Coopers applied for the injunction to be discharged and the Requisitioned EGM
     reconvened. The Court hearing commenced on 11 November 2005 and has been adjourned until 16
     November 2005. Lion Nathan is resisting the application. Subject to the discharge of the injunction,
     Coopers intends to reconvene the Requisitioned EGM at 10.00am on Tuesday, 29 November 2005 and send
     a Notice of Requisitioned EGM to Shareholders. See section 12 for more information. Shareholders should
     read in full the Notice of Requisitioned EGM that will be sent to them, before deciding whether to vote to
     approve this resolution.

62
    PART C - 10. Lion Nathan’s Offer


    10.1.         The Offer

On 1 September 2005, Lion Nathan announced that it intended to make an unsolicited, conditional off-
market takeover Offer for Coopers through Lion Nathan Australia, its wholly owned subsidiary.
On 3 November 2005, Lion Nathan despatched its Bidder’s Statement to Shareholders. The Bidder’s
Statement sets out the terms of and conditions to the Offer. Lion Nathan’s Offer has no minimum acceptance
condition.
The key terms and conditions to the Offer are discussed in the following paragraphs.


    10.2.         Offer consideration

Lion Nathan is offering $260 cash for each Share you hold, irrespective of its class. You can accept the Offer
in respect of all or some of your Shares.
There are a number of factors you should consider that mean, even if you accept the Offer, you may not
receive $260 per Share.
Lion Nathan’s Offer is conditional. Unless certain conditions are satisfied or waived by Lion Nathan, the
Offer will lapse, and you will not be able to transfer your Shares to Lion Nathan under the Offer. See section
10.3 for a discussion of the Offer conditions.
The Pre-Emptive Rights Regime applies to acceptances of the Offer:
• to accept the Offer, you must serve a Transfer Notice under the Pre-emptive Rights Regime. Lion Nathan
  will only be able to acquire your Shares if they are not first purchased by another party under the Pre-
  Emptive Rights Regime; and
• if some or all of your Shares are purchased by another party under the Pre-Emptive Rights Regime, that
  party can elect to purchase them at either $260 per Share or Fair Value as determined by the Coopers
  auditor. The auditor must determine the Fair Value of Shares whenever requested by a purchaser or seller
  under the Pre-Emptive Rights Regime. Fair value may be determined to be an amount different to $260
  per Share and, in particular, may be less. In relation to a Transfer Notice lodged with Coopers on 1
  September 2005 for 6,000 class C Shares, KPMG, the Coopers auditor, issued a Recent Fair Value
  Determination, which determined (as at 28 September 2005) the Fair Value of these Shares to be $260
  per Share1. However, KPMG assessed the value of these Shares without reguard to Lion Nathan’s Offer to



Notes:
1   You should note that the Recent Fair Value Determination relates only to the Shares that were the subject of a Transfer Notice lodged with
    Coopers and was made for the benefit of the buyers and seller of those Shares. Any future Share transfers at Fair Value will be subject to a
    separate Fair Value determination. KPMG has said that the Recent Fair Value Determination is not intended to be used by Coopers or any
    Shareholder other than for this specific purpose nor is it intended to influence a person in making a decision in relation to Shares. For details of
    the Fair Value Mechanism, see section 11.2.


                                                                                                                                                    63
   PART C - 10. Lion Nathan’s Offer

     be $190 per Share (as at 28 September 2005), this indicates what Fair Value would have been as at that
     date if Lion Nathan’s Offer did not exist.
A description of the Pre-emptive Rights Regime and the way in which it interacts with the Offer is set out in
section 11.



   10.3.      Conditions to the Offer and likelihood of the conditions being
              satisfied

Lion Nathan’s Offer is conditional. If any of the conditions to the Offer are not fulfilled or waived by Lion
Nathan, the Offer will lapse. This will result in Lion Nathan being unable to purchase your Shares under the
Offer in any circumstances. However, if Lion Nathan has already served a Transfer Notice on your behalf, that
Transfer Notice will be irrevocable except with the consent of the Directors.
The conditions to Lion Nathan’s Offer are set out in appendix 2 of the Bidder’s Statement.
Below is a summary of the conditions, together with a discussion of what your Board considers is the
likelihood that they will be fulfilled.
Lion Nathan is required to give a notice as to the status of the Offer conditions on 12 December 2005 and
20 February 2006.




Your Board considers that a number of the conditions to
Lion Nathan’s Offer cannot be fulfilled and unless Lion
Nathan waives them (to the extent they can be waived),
there is a strong possibility that the Offer will lapse.
If the Offer lapses, Lion Nathan will not be able to acquire
your Shares under the Offer.

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  PART C - 10. Lion Nathan’s Offer

(a)   No objection under the Foreign Acquisitions and Takeovers Act 1975
      Unless the Commonwealth Treasurer consents to the proposed acquisition under the Foreign
      Acquisitions and Takeovers Act 1975 (Cth), the Offer will lapse. The Treasurer is taken to have
      consented if:
      • Lion Nathan receives written advice from or on behalf of the Treasurer to the effect that the
        acquisition of Shares is not inconsistent with Australian Government foreign investment policy or
        is not objected to under the Foreign Acquisitions and Takeovers Act; or
      • notice of the proposed acquisition of Shares is given to the Treasurer and the Treasurer has ceased
        to be empowered to make any order under Part III of the Foreign Acquisitions and Takeovers Act
        in relation to the proposed acquisition because of lapse of time.
      The Treasurer’s consent is required because more than 15% of Lion Nathan’s shares are controlled by
      foreign shareholders.
      As of the date of this Target’s Statement, your Board is not aware that the Treasurer has provided his
      consent. However, your Directors have no reason to believe that consent will not be given.

(b)   No objection by any public authority
      It is a condition of the Offer that, with the exception of ASIC and the Takeovers Panel, no application
      is made to a public authority, and no decision is made by a public authority, which materially affects
      the making of the Offer, or would require the divestiture by Lion Nathan of any Shares or assets.
      On 11 October 2005, the Federal Court granted an injunction restraining the holding of the
      Requisitioned EGM but gave liberty to Coopers to apply to discharge the injunction upon 24 hours’
      notice. On 8 November 2005, Coopers applied for the injunction to be discharged and the
      Requisitioned EGM reconvened. The Court hearing commenced on 11 November 2005 and has been
      adjourned until 16 November 2005. Lion Nathan is resisting the application. Subject to the discharge
      of the injunction, Coopers intends to reconvene the Requisitioned EGM at 10.00am on Tuesday, 29
      November 2005 and send a Notice of Requisitioned EGM to Shareholders. (See section 12 for more
      information.) If the resolution proposed at the Requisitioned EGM is passed, Lion Nathan would not
      be able to be registered as a holder of Shares without a further constitutional amendment.
      Lion Nathan could argue that Coopers’ application to the Court to have the injunction discharged was
      an application to a public authority for an order that materially adversely impacts the making of the
      Offer in which case, this condition cannot be fulfilled.




                                                                                                         65
  PART C - 10. Lion Nathan’s Offer

(c)   No objection by the ACCC
      A key condition of the Offer is that there should be no objection by the ACCC. In order to satisfy this
      condition, Lion Nathan needs to either:
      • receive notice in writing to the effect that the ACCC does not propose to intervene or seek to
        prevent Lion Nathan’s acquisition of Shares under the Offer; or
      • be granted clearance or authorisation to acquire Shares under the Offer by the ACCC or the
        Australian Competition Tribunal under Part VII of the Trade Practices Act 1974 (Cth), and no
        application for review of such clearance or authorisation is made within the period prescribed by
        the Trade Practices Act.
      The ACCC will grant informal clearance or give notice to Lion Nathan that it does not propose to
      intervene or seek to prevent Lion Nathan’s acquisition of Shares if it concludes that the Offer will not
      have the effect, or is not likely to have the effect, of substantially lessening competition in any
      substantial market in Australia and consequently does not contravene section 50 of the Trade
      Practices Act.
      In order for Lion Nathan’s acquisition of Shares to be authorised, the ACCC or the Australian
      Competition Tribunal will need to be satisfied that in all the circumstances, the acquisition would
      result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to
      take place.
      The ACCC received a submission from Lion Nathan on 26 September 2005 and commenced its
      assessment under the ACCC’s Informal Merger Guidelines. The ACCC’s timeline for the
      consideration of Lion Nathan’s application indicates that the announcement of the ACCC’s Mergers
      Review Committee’s findings will be made on 15 November 2005.
      The announcement by the ACCC of the Mergers Review Committee’s findings will either indicate
      that no competition issues are raised or will indicate that the ACCC is of the view that the acquisition
      will or may be likely to substantially lessen competition. In the latter case, the ACCC will issue a
      Statement of Issues and a secondary timeline will be established for the finalisation of the ACCC’s
      consideration of the matter. The length of time required depends on the complexity of the issues, the
      nature of the ACCC’s concerns, the need to consult further with the market and the likely resolutions
      required. This further consideration may take some weeks.
      At this stage, the ACCC has not yet concluded its investigation into the proposed acquisition and its
      views regarding any competition issues are not yet known.




66
  PART C - 10. Lion Nathan’s Offer

(d)   No material adverse effect
      The Offer is conditional upon no event or occurrence occurring or being announced that will, or is
      reasonably likely to, have a material adverse effect on the assets and liabilities, financial position and
      performance, profits and losses or prospects of Coopers and its subsidiaries, including as a result of
      making the Offer or the acquisition of Shares pursuant to the Offer.
      As of the date of this Target’s Statement, the Board is not aware of any such events or occurrences.

(e)   No material acquisitions, disposals or new commitments
      The Offer is conditional upon Coopers not making certain acquisitions or disposals for an amount in
      aggregate greater than $5 million and not entering into, or offering or agreeing to enter into a Material
      Agreement or making an announcement in relation to such an entry, offer or agreement.
      Coopers is completing documentation of an extension to the term of its existing distribution
      agreement with Premium Beverages. Additional expenditure in excess of $2 million is likely to occur
      over the extended life of the agreement and the extension may, therefore, be a Material Agreement.
      See section 18.3(c) for more information about this agreement.

(f)   Confirmation of capital structure
      The Offer is conditional upon confirmation of certain matters including:
      (i)     issued Share capital;
      (ii)    there being no options to subscribe for Shares, or other securities that are convertible into
              Shares, or any other arrangements, agreements or undertakings which have, or which may
              have, the effect of increasing the number of Shares;
      (iii)   Coopers has not entered into, agreed to enter into or offered to enter into any Material
              Agreements with any worldwide competitor of Coopers or Lion Nathan; and
      (iv)    no person becoming entitled to exercise any rights under a Material Agreement (including the
              right to terminate, vary, transfer or redeem such an agreement) as a result of the Offer.
      Coopers considers that the conditions set out in items (i) and (ii) have been fulfilled. See section 18.2
      for more information.
      Coopers has an existing manufacturing and distribution agreement with Carlsberg and Premium
      Beverages has a distribution agreement with Anheuser-Busch, both of whom are worldwide
      competitors of Coopers or Lion Nathan. Coopers considers the arrangements to be Material
      Agreements with the result that, if Lion Nathan seeks to apply the condition set out in item (iii) to
      Material Agreements in existence at the time the Offer was announced, the condition cannot be
      fulfilled. See section 18.3(a) for more information about these agreements.




                                                                                                            67
  PART C - 10. Lion Nathan’s Offer

      Coopers is a party to a number of arrangements, that it considers to be Material Agreements and, that
      may entitle a person to exercise rights including termination as a result of the Offer. In each case, the
      entitlement to exercise rights is dependent on the number of Shares that Lion Nathan is able to
      acquire, under the Offer or otherwise. Coopers considers that there is a potential that the condition
      set out in item (iv) cannot be fulfilled. See section 18.3 for more information about these
      arrangements.

(g)   Lion Nathan must be granted the right to appoint one nominated person to
      Coopers’ Board for every 15% of the issued share capital held.
      The Offer is subject to a condition that Lion Nathan has the right to appoint a Director to the Coopers
      Board for every 15% of share capital it acquires from time to time, irrespective of the class of Shares it
      holds from time to time.
      Coopers’ Board does not have the power to satisfy this condition.
      The rules for appointment of Directors are contained in the Coopers Constitution. The right to elect
      a Director currently depends on the class of Shares held. For example, the holders of class A and class
      B Shares each have a right to appoint two Directors, while the holders of class D Shares have the right
      to appoint one Director. The holders of class C Shares have the right, together with the holders of class
      A, class B and class D Shares, to appoint a Director at a general meeting, provided that the proposed
      Director is nominated by a unanimous resolution passed by all of the Directors appointed by the
      holders of class A, class B and class D Shares.
      Lion Nathan has indicated in its Bidder’s Statement that it would consider this condition as being
      satisfied if Coopers’ Board and the holders of a majority of each of the class A, class B and class D
      Shares publicly stated that they will take such practical steps as are necessary to achieve that outcome.
      Coopers has been notified informally by the holders of a majority of class A, class B and class D Shares
      that they are not prepared to make this statement and would not support the appointment of Lion
      Nathan’s representatives to Coopers’ Board if Lion Nathan was to acquire 15% or more of Coopers’
      Shares.
      Based on the above information, the condition is not currently fulfilled and your Board believes that
      it is unlikely to be fulfilled during the Offer Period.

(h)   Confirmation that the Directors will provide an irrevocable consent that Lion
      Nathan is not in breach of article 143 of the Coopers Constitution
      Lion Nathan’s Offer is conditional upon it receiving an irrevocable confirmation from the Directors
      that Lion Nathan is not in breach of article 143 of the Coopers Constitution such that the Directors
      will not refuse to register Lion Nathan or to force Lion Nathan to retire once it is a Shareholder.
      Subject to the discharge of an injunction currently restraining the meeting being held, Coopers
      intends to reconvene the Requisitioned EGM at 10am on Tuesday, 29 November 2005 at 461 South
      Road, Regency Park South Australia. As described in more detail in section 12, the resolution to be
      considered at the Requisitioned EGM is a resolution which, if passed, will have the effect of removing



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  PART C - 10. Lion Nathan’s Offer

      Lion Nathan’s exemption from being treated as a competitor under article 143 of the Coopers
      Constitution.
      The Directors have not provided the requested irrevocable confirmation and do not currently intend
      to do so. If the resolution is passed at the Requisitioned EGM, the Directors will not be able to provide
      this irrevocable confirmation as Lion Nathan will cease to be deemed not to be a competitor and as
      such will become a person who may be required to retire under article 143. Article 54 states that the
      Directors must not register a transfer in favour of such a person.

      Lion Nathan has indicated in its Bidder’s Statement that if the resolution is passed
      at the Requisitioned EGM it is unlikely you would receive the benefits of the
      Offer.
(i)   No prescribed occurrences
      Lion Nathan’s Offer is conditional upon a number of specified occurrences not occurring during the
      Offer Period.
      It is possible that several of those occurrences will in fact occur, leading to the non-fulfilment of this
      condition:
      • It is a condition of the Offer that Coopers does not enter into a buy-back or resolve to approve a
         buy-back. If the Buy-Back is approved by Shareholders at the Buy-Back EGM, this condition will
         not be capable of being fulfilled; and
      • It is a condition of the Offer that Coopers does not change the Coopers Constitution. Both the
        Requisitioned EGM and the Buy-Back EGM include resolutions to amend the Coopers
        Constitution.
         The details of these resolutions are described in sections 12 and 13. If the resolutions are passed,
         this condition cannot be fulfilled.




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    PART C - 10. Lion Nathan’s Offer


    10.4.          Consequences of conditions not being fulfilled

For the reasons set out above, Coopers considers there are a number of conditions to Lion Nathan’s Offer
that cannot at this time be fulfilled and a significant risk that further conditions to the Offer may not be
fulfilled.
You should be aware that even if the conditions to the Offer are not fulfilled, Lion Nathan may waive them
and proceed with its Offer. If Lion Nathan does not waive an unfulfilled condition, the Offer will lapse.
Under the Coopers Constitution a Transfer Notice, once served, is irrevocable except with the consent of
the Directors. If, as a result of any non-fulfillment of the conditions, the Offer lapses but Lion Nathan has
already served a Transfer Notice with Coopers on your behalf, you will continue to be bound to sell your
Shares under the Pre-emptive Rights Regime unless the Directors consent to you revoking your Transfer
Notice.
The Directors can only exercise their discretion at the time at which the relevant circumstances occur. In
doing so they must have regard to the interests of the Company and take into account the interests of both
buyers and sellers of Shares. There can be no guarantee that the discretion to permit revocation of a
Transfer Notice will be exercised in any particular case. The Fair Value of your Shares, if Lion Nathan’s
Offer has lapsed, may be less than $260 per Share. Although KPMG indicated in its Recent Fair Value
Determination that the Fair Value of certain class C Shares is $260 per Share it assessed the value of those
Shares without regard to the Lion Nathan’s Offer to be $190 per Share (as at 28 September 2005), this
indicates what Fair Value would have been as at that date if Lion Nathan’s Offer did not exist. If KPMG
made a determination in relation to any of your Shares after Lion Nathan’s Offer had lapsed, or after it
became increasingly likely that the Offer would lapse, it is possible that Fair Value may be determined to
be lower than $260 per Share and you would be required to sell your Shares at this lower Fair Value.




Notes:
1    You should note that the Recent Fair Value Determination relates only to the Shares that were the subject of a Transfer Notice lodged with
     Coopers and was made for the benefit of the buyers and seller of those Shares. Any future Share transfers at Fair Value will be subject to a
     separate Fair Value determination. KPMG has said that the Recent Fair Value Determination is not intended to be used by Coopers or any
     Shareholder other than for this specific purpose nor is it intended to influence a person in making a decision in relation to Shares. For details of
     the Fair Value Mechanism, see section 11.2.


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      PART C - 10. Lion Nathan’s Offer


      10.5.   Offer Period

Unless the Offer is extended, withdrawn or lapses, the Offer will be open for acceptance from the date of
the Offer, being 3 November 2005, until 28 February 2006.
In its Bidder’s Statement, Lion Nathan advises Shareholders to provide Transfer Notices to it no later than
7pm (Adelaide time) on 20 December 2005 (unless extended) to allow time for the Pre-emptive Rights
Regime to operate prior to the expiry of the Offer. In order to process your acceptance, Lion Nathan
Australia must become “eligible” to acquire your Shares by 28 February 2006. You should note that the
period during which the Pre-emptive Rights Regime operates is not fixed. Some parts of the Pre-emptive
Rights Regime process are beyond the control of both Lion Nathan and Coopers. For example, the auditor
has no fixed time period within which it must make a Fair Value determination.
If Lion Nathan does not become eligible to acquire your Shares by 7.00pm on Tuesday, 28 February 2006
(unless extended), your acceptance will not be complete and the Offer will lapse. However, if Lion Nathan
has already served a Transfer Notice with Coopers on your behalf, it will still be valid and the Shares
specified in it will remain subject to sale under the Pre-Emptive Rights Regime subject to the Board
exercising its discretion to allow you to withdraw your Transfer Notice.




      10.6.   Extension of the Offer

While the Offer remains subject to conditions, it may be extended only before Lion Nation gives notice
regarding the status of the conditions, which it has said it will do on 12 December 2005 and 20 February
2006. If the Offer becomes unconditional (that is, if all the conditions are satisfied or waived) it may be
extended at any time before the expiry of the Offer Period.
In addition, there will be an automatic extension of the Offer Period if, within the last seven days of the
Offer Period:
(a)     Lion Nathan improves the price under the Offer; or
(b)     Lion Nathan’s voting power increases to more than 50%.
If either of these two events occurs, the Offer Period will be automatically extended so that it ends 14 days
after the relevant event occurs.




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   PART C - 10. Lion Nathan’s Offer


   10.7.       Withdrawal of the Offer

Lion Nathan may withdraw the Offer for your Shares with the written consent of ASIC and subject to the
conditions (if any) specified in such consent.



   10.8.       Lapse of the Offer

The Offer will lapse if the conditions to the Offer are not fulfilled or waived by the end of the Offer Period.
If the Offer lapses, all contracts resulting from acceptance of the Offer and all acceptances which have not
yet resulted in binding contracts will become void. However, you will continue to be bound by any Transfer
Notice that Lion Nathan has served Coopers on your behalf - see section 10.4.



   10.9.       What are your options as a Shareholder?

As a Shareholder you currently have a number of options, depending upon what outcome you would like to
see.

 I DO NOT want Lion Nathan’s Offer to proceed and I want to keep my
 Shares.

1. Do nothing in relation to the Offer
     Shareholders who do not want to accept the Offer and want to keep their Shares should do nothing in
     relation to the Offer.
     Shareholders should note that if Lion Nathan acquires at least 90% of Coopers’ Shares, it will be entitled
     to compulsorily acquire the remaining Shares that it does not already own.
2. Attend the Requisitioned EGM and consider the resolution to remove Lion Nathan
   from the Coopers Constitution
     If the resolution is approved, Lion Nathan’s third tier pre-emptive right would be removed, it would be
     prohibited from being registered as a Shareholder, any Shares that it had acquired may be compulsorily
     sold under the Pre-Emptive Rights Regime and its Offer would lapse. See section 12 and the Notice of
     Requisitioned EGM for more information concerning the Requisitioned EGM and its effect on the Offer.




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  PART C - 10. Lion Nathan’s Offer

3. Attend the Buy-Back EGM and consider the Buy-Back resolutions
  If the Buy-Back resolutions are approved, Shareholders who want to sell some or all of their Shares, but
  do not want to accept Lion Nathan’s Offer, will be able to consider tendering Shares into the Buy-Back
  (subject to the scale back of applications if more than 15% of all issued Shares are tendered). See sections
  13 and 14, the Notice of Buy-Back EGM and the Buy-Back Documents for more information concerning
  the Buy-Back.

 I DO NOT want Lion Nathan’s Offer to proceed but I want to sell some
 or all of my Shares.

1. Do nothing in relation to the Offer
  Shareholders who do not want to accept the Offer but want to realise value for some or all of their Shares
  should do nothing in relation to the Offer. Take no action in relation to documents received from Lion
  Nathan, or telephone calls it makes, to you.

2. Attend the Requistioned EGM and consider the resolution to remove Lion Nathan
   from the Coopers Constitution
  If the resolution is approved, Lion Nathan’s third tier pre-emptive right will be removed, it would be
  prohibited from being registered as a Shareholder, any Shares that it had acquired may be compulsorily
  sold under the Pre-Emptive Rights Regime and its Offer would lapse. See section 12 and the Notice of
  Requisitioned EGM for more information concerning the status of the Requisitioned EGM and its effect
  on the Offer.
3. Attend the Buy-Back EGM and vote to approve the Buy-Back resolutions
  If the Buy-Back resolutions are approved, you will be able to consider selling some or all of your Shares
  without accepting Lion Nathan’s Offer by tendering them into the Buy-Back (subject to the scale back of
  applications if more than 15% of all issued Shares are tendered). See sections 13 and 14, the Notice of
  Buy-Back EGM and the Buy-Back Documents for more information concerning the Buy-Back.




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   PART C - 10. Lion Nathan’s Offer


 I want to accept Lion Nathan’s Offer.
1. Accept the Offer by completing a Transfer Notice
     Your Directors (except David Kingston, who has a conflict of interest as outlined in section 15.1 and is
     therefore unable to make a recommendation) recommend that you REJECT the Offer for the reasons set
     out in this Target’s Statement. However, if you want to accept the Offer, please refer to section 1.6 of the
     Bidder’s Statement for instructions.
2. Attend the Requisitioned EGM and vote against the resolution to remove Lion Nathan
   from the Coopers Constitution
     If the resolution is approved, Lion Nathan’s third tier pre-emptive right would be removed, it would be
     prohibited from being registered as a Shareholder, any Shares that it had acquired may be compulsorily sold
     under the Pre-Emptive Rights Regime and its Offer would lapse. See section 12 and the Notice of
     Requisitioned EGM for more information concerning the status of the Requisitioned EGM and its effect on
     the Offer.
3. Attend the Buy-Back EGM and vote against the Buy-Back resolutions
     If the Buy-Back resolutions are approved, conditions to the Offer will not be fulfilled and Lion Nathan’s
     Offer may lapse.

 I want to acquire more Coopers’ shares.
You may be able to acquire more Shares as a result of Lion Nathan’s Offer. Shares offered to Lion Nathan will
be subject to the Pre-Emptive Rights Regime which requires your Directors to attempt to find buyers for these
Shares from among existing Shareholders and Member’s Relatives.
At your option, you may elect to purchase available Shares at the price fixed by their seller or at their Fair Value
as determined by the Coopers auditor.
To register your interest, complete the registration of interest form that has been sent to you with this Target’s
Statement and return it to Haydn Duffield (see contact details in the form).




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      PART C - 11. Pre-Emptive Rights Regime


      11.1.      Pre-Emptive Rights Regime

The Coopers Constitution contains pre-emptive rights provisions that set out a procedure that must be
followed by any Shareholders who propose to transfer any of their Shares. This is referred to as the Pre-
Emptive Rights Regime.
The presence of the Pre-emptive Rights Regime in the Coopers Constitution is a reflection of Coopers’ origins
as a closely held family company. Pre-emptive rights provisions of some kind have been in place since at least
1923. Today, as an unlisted public company, Coopers continues to be reasonably closely held with only 118
Shareholders (most of whom are descendants of the founder, Thomas Cooper) and pre-emptive rights continue
to apply.
The Pre-Emptive Rights Regime is set out in articles 38 to 52 of the Coopers Constitution. An extract of the
Coopers Constitution that includes these articles is set out in appendix 3. The prescribed procedure can be
summarised as follows.
(a)     Aside from transfers by a Shareholder to a Member’s Relative (see section 11.3), a Shareholder who
        proposes to transfer his or her Shares must give a Transfer Notice to Coopers which constitutes the
        Company as agent of that person for the sale of the Shares to any Shareholder at:
        • the price fixed by the transferor in the Transfer Notice; or
        • at the option of the purchaser, the Fair Value to be fixed by the Coopers auditor (currently
              KPMG). (This is referred to as the Fair Value Mechanism and is explained in section 11.2.)
        If a Transfer Notice is given in relation to more than one Share, it will operate as if separate notices have
        been given for each Share specified in the notice.
        Once a Shareholder gives a Transfer Notice to Coopers it cannot be revoked except with the consent of
        the Directors.
        The term “transfer” is defined by the Coopers Constitution to include:
        • the sale, assignment, offer, disposal of, transfer or dealing in any way with any rights, title or interest
          in any Shares (whether legal or beneficial and whether for valuable consideration or not);
        • the agreement to sell, assign, offer, dispose of, transfer or deal in any way with any right, title or
          interest in any Share (whether legal or beneficial and whether for valuable consideration or not); and
        • creating, declaring or allowing to be created any trust over any Share.
(b)     After Coopers receives a Transfer Notice, the Directors have 28 days to find Shareholders or Member’s
        Relatives willing to purchase the Share specified in the notice and to notify the transferor that such a
        purchaser has been found. This is referred to as the “first tier” pre-emptive rights.
(c)     If Coopers and the Directors do not find any Shareholders or Member’s Relatives willing to purchase the
        Share specified in the Transfer Notice, it must be offered to AMP Life or to any other trustee of a
        superannuation fund in which more than 10% of the employees of Coopers are members.




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      PART C - 11. Pre-Emptive Rights Regime

        The same pricing principles apply to these “second tier” pre-emptive rights as apply to the first tier pre-
        emptive rights, that is, the institutions may accept the price fixed by the transferor in the Transfer Notice
        or elect to have Fair Value determined by the Coopers auditor. The offer to the institutions is open for
        28 days.
(d)     If no purchasers are found under the first and second tier pre-emptive rights, the Share specified in the
        Transfer Notice must be offered to Lion Nathan. The same pricing principles apply to this “third tier”
        pre-emptive right as apply to the first tier and second tier pre-emptive rights. The offer is again open for
        28 days.
        The third tier pre-emptive right was included in the Coopers Constitution in 1995 as part of a settlement
        of disputes between Coopers and Lion Nathan (see section 11.5).
(e)     Only after the above pre-emptive rights have been exhausted can a Shareholder sell the Share specified
        in the Transfer Notice to another person. The sale must occur within three months and must be at a
        price no lower and on terms no more advantageous than those offered under the Pre-Emptive Rights
        Regime (i.e. the price cannot be less than the price fixed by the transferor in the Transfer Notice or the
        Fair Value fixed by the Coopers auditor).
        Unlike a transfer made pursuant to the exercise of first, second or third tier pre-emptive rights, the
        Directors may refuse to register a transfer made to another person where they are of the opinion that it
        is not desirable to admit that person to membership.



      11.2.    Fair Value Mechanism

The Fair Value Mechanism is activated when a person elects to purchase Shares offered under the first, second
or third tier pre-emptive rights at the Fair Value to be fixed by the Coopers auditor. Upon application of either
party, the Coopers auditor may be called upon to certify in writing the sum which, in the auditor’s opinion, is
the Fair Value for the Share specified in the Transfer Notice.

Recent KPMG Fair Value Determination
KPMG, as auditor of Coopers, made a determination as at 28 September 2005 as to Fair Value in relation to a
class C Share for the purpose of article 42 of the Coopers Constitution. The determination related to a Transfer
Notice for 6,000 class C Shares given to Coopers by a Shareholder pursuant to the Pre-Emptive Rights Regime.
KPMG determined the Fair Value of a class C Share to be $260 for the purpose of article 42, as at 28 September
2005.
KPMG has not, whether in the course of the determination of the Fair Value in relation to a class C Share for
the purpose of article 42 of the Coopers Constitution or otherwise, assessed the fairness and reasonableness of
the Lion Nathan Offer to Coopers’ Shareholders.




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   PART C - 11. Pre-Emptive Rights Regime

Approach
In the course of forming its opinion as to the Fair Value of a class C Share for the purpose of article 42, KPMG:
• considered the value of a class C Share under the Coopers Constitution without regard to the Lion Nathan
  Offer; and
• considered the Lion Nathan Offer.

Value of a class C Share without regard to the Lion Nathan Offer
Approach
KPMG assessed the value of a class C Share under the Coopers Constitution without regard to the Lion Nathan
Offer to be $190.
In undertaking this assessment KPMG first calculated the value of a Share in Coopers forming part of a
marketable minority interest (i.e. excluding a premium for control).
KPMG considered the most appropriate methodology to determine the value of a marketable minority interest
in Coopers, without regard to the Lion Nathan Offer (which was considered separately), to be a capitalisation
of earnings approach. This approach was adopted as a primary valuation methodology due to, inter alia:
• the availability of robust information from comparable companies and several recent comparable
  transactions; and
• the relative stability of the level and trend in Coopers historical and forecast operating revenues and
  earnings.
The bases for each of the main assumptions included in KPMG’s calculation are as follows:
• the maintainable earnings selected reflects consideration of both historical and forecast earnings of Coopers;
• the multiple applied to selected maintainable earnings was selected with reference to comparable company
  and transaction analysis; and
• net debt was based on Coopers’ audited statement of financial position at 30 June 2005.
KPMG cross-checked the result of the valuation for reasonableness to secondary valuation methods. These
other methods included a high level discounted cash flow analysis, multiples of revenue and net tangible
operating assets and an implied dividend yield. The cross-checks performed supported KPMG’s valuation
conclusion.
KPMG then made the following adjustments to the valuation of a Share in Coopers forming part of a
marketable minority interest:
• considered an appropriate discount applicable to a Share in Coopers forming part of a marketable minority
  interest, to reflect the relative lack of marketability in Coopers' Shares. In this regard, KPMG applied a
  discount of 5% to 15% based on the circumstances and its experience and professional judgement;
• calculated an average value per Coopers' Share (for all classes of Shares), based on the total Shares on issue;
  and
• considered the extent of the adjustment required to reflect differences between the rights of an A, B, C and
  D class Share in the Company.

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   PART C - 11. Pre-Emptive Rights Regime

KPMG’s assessment, which has been undertaken for the purpose of article 42 of Coopers Constitution, differs
from that which would have been undertaken by KPMG for a fairness and reasonableness opinion in the
context of a takeover. KPMG has not assessed the fairness and reasonableness of the Lion Nathan offer to
Coopers’ Shareholders.

Average value per Coopers Share
KPMG assessed the average value of a Coopers Share to be $192 as set out below.
Table 1: Average value per Coopers Share

                                                                                       Valuation range
                                                                            Low                             High
                                                                           $’000                           $’000

Maintainable EBITDA                                                        31,000                          31,000
EBITDA multiple                                                             9.0 x                          10.0 x
Enterprise value                                                        279,000                          310,000
Net debt                                                                  (7,300)                         (7,300)
Equity value (excluding a control premium)                              271,700                          302,700
Number of Shares (000s)                                                     1,353                           1,353
Pro-rata value per Share ($)                                                 201                             224
Discount for lack of marketability                                           15%                              5%
Average value per Coopers Share ($)                                          171                             212
Mid-point ($)                                                                                 192


Valuation of a class C Share
KPMG considered market evidence of the appropriate discount to be applied to a class C Share to reflect the
differences between the rights of a class C Share relative to an A, B or D class Share.
Due to over 90% of issued Shares being class C, a small re-allocation of value away from class C Shares to A, B
and D class Shares results in a relatively larger increase in the value of class A, B and D Shares. Accordingly, a
negligible discount is required to be applied to a class C Share to reflect the differences between the rights of a
class C Share relative to an A, B or D class Share.
KPMG determined the value of a class C Share in Coopers under article 42 of Coopers Constitution, without
regard to the Lion Nathan offer, to be $190.

Lion Nathan Offer
The Lion Nathan Offer price of $260 per Share does not, of itself, establish the Fair Value at $260 per Share for
the purpose of article 42 of Coopers Constitution. However, KPMG considered that it was within accepted
valuation principles to consider a genuine takeover offer in assessing the Fair Value of a class C Share in
Coopers, as it represents the amount that an alternative acquirer might be prepared to pay for Coopers’ Shares.




78
      PART C - 11. Pre-Emptive Rights Regime

With regard to the Lion Nathan Offer, KPMG is of the view that, as at 28 September 2005:
• the Lion Nathan Offer was genuine; and
• Lion Nathan was a ready, willing and able purchaser as at 28 September 2005 (absent the operation of the
  Pre-Emptive Rights Regime).
On the basis of the above, KPMG determined that it was within accepted valuation principles to consider the
Lion Nathan Offer of $260 per Share in arriving at the Fair Value of a class C Share in Coopers under article
42 of Coopers Constitution. Specifically, KPMG determined that the Lion Nathan Offer effectively established
a floor to Fair Value as at 28 September 2005.

Conclusion
KPMG determined that the Fair Value of a class C Share for the purpose of article 42, as at 28 September 2005,
was reflected by the greater of the assessment of the value of a class C Share under the Coopers Constitution
without regard to the Lion Nathan Offer, and the Lion Nathan Offer, and accordingly determined the Fair
Value to be $260 per class C Share for the purpose of article 42 of the Coopers Constitution.
Any future Share transfers at Fair Value will need to be subject to a separate Fair Value determination. If a Fair
Value determination was subsequently to be requested then the Fair Value determination would take into
consideration the circumstances then existing, and accordingly a different result may then be reached.
KPMG's determination for the purpose of article 42 was not intended to be, and should not be, considered as
an assessment of whether Lion Nathan's Offer is fair and reasonable to Coopers’ Shareholders. In that regard,
your attention is drawn to the remainder of this Target’s Statement and the Independent Expert’s Report in
appendix 1.
KPMG’s determination relates only to the Shares that were the subject of the Transfer Notice, and was only for
the benefit of the buyers and sellers of those particular Shares. This determination for the purpose of the Pre-
Emptive Rights Regime is not intended to influence a person or persons in making a decision in relation to their
Shares.

ASIC Relief
See section 18.6 for a description of the basis upon which ASIC has granted relief to allow the inclusion of a
description of KPMG’s Recent Fair Value determination.


      11.3.   Exceptions to the Pre-Emptive Rights Regime

The Coopers Constitution currently provides for the following exceptions to the Pre-Emptive Rights Regime.
(a)     A Shareholder (or the executors or administrators of the estate of a deceased Shareholder) may transfer
        his or her Shares to any Member’s Relative of that Shareholder.
(b)     Shares held in the name of a trustee of the will of a deceased Shareholder may be transferred to a
        successor trustee.




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      PART C - 11. Pre-Emptive Rights Regime

(c)     A person who becomes entitled to a Share in consequence of the death or bankruptcy of a Shareholder
        is entitled to be registered as the holder of that Share. If, however, they nominate another person to be
        registered as holder, the Pre-Emptive Rights Regime will apply.
The term “Member’s Relative” is defined by articles 1(p) and (q) of the Coopers Constitution. An extract of
the Coopers Constitution that includes these articles is set out in appendix 3.



      11.4.   Additional transfer restrictions

In addition to the Pre-Emptive Rights Regime, article 143 of the Coopers Constitution further restricts the
ability of Shareholders to transfer Shares. Article 143 forbids a Shareholder from being interested in any
concern carrying on business in competition with Coopers, or having interests inconsistent with those of
Coopers, without the consent of the Directors. If a Shareholder contravenes this provision, it may be required
to retire from or otherwise determine its interest in the concern and, failing compliance within 28 days, its
Shares will be liable for sale under the Pre-Emptive Rights Regime. Article 54 of the Coopers Constitution
requires Directors to refuse to register any transfer of Shares to a person where, in accordance with article 143,
that person may be required to retire as a Shareholder.
The presence of this provision in the Coopers Constitution is a reflection of the desire of the Shareholders who
adopted it to maintain Coopers’ status as an independent brewer. Directors are required to refuse to register any
transfer of a Share where, in accordance with article 143, the transferee may be required to retire as a
Shareholder. Therefore, a Shareholder cannot transfer Shares to a competitor unless the Coopers Constitution
is first amended to permit the registration of that transfer.
Various entities related to Lion Nathan are currently deemed by article 143 not to be carrying on business in
competition with Coopers and not to have interests which are inconsistent with those of Coopers. This
deeming provision was included in the Coopers Constitution in 1995 as part of a settlement of disputes between
Coopers and Lion Nathan (see section 11.5).
Under article 54 of the Constitution, the Directors may refuse to register a transfer to another person where
they are of the opinion that it is not desirable to admit that person to membership. However, this provision does
not apply where the proposed transferee is already a Shareholder or the transfer is made to a Member’s Relative
or is made pursuant to the exercise of first, second or third tier pre-emptive rights.


      11.5.   Background to Lion Nathan’s third tier pre-emptive right

In 1993, Lion Nathan acquired the brewing assets of Southcorp (then known as SA Brewing Holdings Limited).
At that time, Southcorp held approximately 26.2% of Coopers’ Shares having originally acquired them in 1962
as part of a cross-shareholding alliance formed between the two companies in response to a number of takeovers
in the industry at that time. Although Southcorp declared a trust over its Shares in favour of Lion Nathan, it
did not seek to initiate the pre-emptive rights regime (as then contained in the Coopers Constitution). Coopers


80
    PART C - 11. Pre-Emptive Rights Regime

objected to this conduct alleging that it was an attempt to avoid the operation of the pre-emptive rights regime
(as it then existed). Around that time a dispute also arose between Lion Nathan and Coopers concerning
Adelaide Bottle Co Pty Ltd.
In settlement of these disputes, Coopers and Lion Nathan agreed to certain amendments to the Coopers
Constitution, including the addition of a third tier pre-emptive right in favour of Lion Nathan and the deeming
provision discussed in section 11.4. Southcorp subsequently sold a number of its Shares through the Pre-
Emptive Rights Regime and agreed to the remainder being cancelled pursuant to the 1995 Coopers Capital
Reduction.
See section 16.2 for a discussion of a recent decision of the Supreme Court of South Australia which declared
that Shareholders now have the right to amend the Coopers Constitution to remove the third-tier pre-emptive
right and deeming provision.


    11.6.          Recent operation of the Pre-Emptive Rights Regime

Since 1 July 2000, changes of ownership have been registered in respect of a total of 145,197 Shares
(representing approximately 10.7% of issued Shares), comprising:
• 71,552 Shares by inheritance;
• 33,240 Shares to Member’s Relatives; and
• 40,405 Shares by operation of the Pre-Emptive Rights Regime.
Source: Coopers’ register of members.

Note: These figures exclude 30,259 Shares bought back and cancelled pursuant to the 2003 Coopers Share Buy-Back.

Shares were transferred during that time at two prices under the Pre-Emptive Rights Regime:
• $16.27 per Share (the last sale at that price occurring in December 2002); and
• $45.01 per Share (the first sale at this price occurring in November 2003 and the most recent sale at this
  price occurring in October 2004). This was also the price at which Shares were bought back and cancelled
  pursuant to the 2003 Coopers Share Buy-Back.
Lion Nathan’s Bidders Statement referred to allegations made in the Australian newspaper on 27 October 2005
concerning the sale of Shares in Coopers by IEL in 2000. Coopers asked Lion Nathan if it would substantiate
the allegations but Lion Nathan said it had no documents to substantiate them and had verified the inclusion
of the allegations from newspaper reports.
Coopers rejects the allegations that it provided unlawful financial assistance in connection with the sale by IEL
of its Shares in July 2000. Further, Coopers confirms that its Shareholders were aware of the intention by IEL
to sell their Shares and had an opportunity to express their interest to acquire Shares from IEL at $16.27.
Further, those Shareholders who expressed such interest were allocated the quantum of Shares they wished to
purchase.




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   PART C - 11. Pre-Emptive Rights Regime


   11.7.      Allocation of Shares under the Pre-Emptive Rights Regime

The Pre-Emptive Rights Regime does not mandate a method for allocating Shares under first-tier pre-emptive
rights. As such, the Directors have a discretion on how allocations are made. In exercising this discretion, they are
required to act in accordance with their fiduciary obligations to Coopers.
When the Pre-Emptive Rights Regime has been activated in recent times, Directors sought a purchaser or
purchasers from Shareholders who were in the same family line as the Shareholder who was proposing to transfer
Shares.
The Pre-Emptive Rights Regime was most recently activated on 1 September 2005 when Mr Barry Schrapel,
through Lion Nathan’s solicitors, gave a Transfer Notice in relation to 6,000 (of his 7,000) class C Shares in which
he specified $260 as the price for each Share. Mr Schrapel gave his Transfer Notice pursuant to a pre-bid
arrangement with Lion Nathan which is discussed in section 11.8.
After Coopers received Mr Schrapel’s Transfer Notice, its Managing Director, Dr Tim Cooper, wrote to each
Shareholder on 13 September 2005 seeking to update an existing list of Shareholders who had previously indicated
that they may be willing to purchase more Shares if Coopers received Transfer Notices. The Board excluded
Shareholders who were Directors or the immediate family member of a Director from applying for Shares because,
at the time, the results for the financial year ended 30 June 2005 and amount of the final dividend payment for
that financial year had not yet been announced.
Each eligible Shareholder on that list was subsequently contacted and asked if they wanted to acquire any of the
Shares specified in Mr Schrapel’s Transfer Notice. Valid notifications were received from 14 Shareholders for 6,325
of the 6,000 available Shares. Notifications from two other Shareholders were ruled invalid because they had been
expressed to be conditional on Fair Value falling within a specified range.
Of the 14 Shareholders who submitted valid notifications, only one accepted the $260 specified by Mr Schrapel
in his Transfer Notice (that person applied for five of the 6,000 available Shares). All other Shareholders elected
to have Fair Value determined by the Coopers auditor. The 6,000 available Shares were allocated on a pro rata
basis among all of the Shareholders with the result that three applicants were scaled back.
As nearly all applicants had expressed a willingness to acquire the Shares at the Fair Value to be fixed by the
Coopers auditor and there was uncertainty as to what that amount would be, Coopers’ Board wrote to Mr Schrapel
advising him that it would be willing to allow him to revoke his Transfer Notice if he wished to do so. Mr Schrapel
did not apply to withdraw his Transfer Notice and the allocation was made.
Mr Schrapel subsequently brought proceedings against Coopers in relation to this allocation. (See section 16.6 for
a discussion of these proceedings.)




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   11.8.        Current Allocation Policy

The current policy of Coopers’ Board in relation to the allocation of Shares under the Pre-Emptive Rights Regime
was adopted on 11 November 2005 and is set out in appendix 4. The policy provides that Shares will be offered
under the first tier pre-emptive rights to Shareholders in the same class pro rata to their existing holdings, then to
Shareholders generally pro rata to their existing holdings and finally to Member’s Relatives nominated by a
Shareholder pro rata to the holdings of the nominating Shareholder(s) in respect of whom they are Members’
Relatives.


   11.9.        Lion Nathan pre-bid arrangements

Lion Nathan has entered into pre-bid arrangements with the following Shareholders:

         Name                                Date of Entry                        Shares Covered

         Beth Berry                          8 September 2005                                1,124
         Alastair Burnside Cooper            9 September 2005                                1,000
         Richard Burnside Cooper             9 September 2005                                7,190
         Drew Crossland                      22 September 2005                               2,000
         Sara Dawe                           28 September 2005                               2,752
         Mary Henderson                      11 September 2005                                 600
         Royston Lillecrapp                  6 October 2005                                    603
         Barry Schrapel                      27 August 2005                                  6,000
                                             16 September 2005                                 500
         Elizabeth Schrapel                  28 September 2005                                100
         Margaret Thomson                    15 September 2005                              2,000
         Peter Thomson                       8 September 2005                               6,000
                                                                                           29,869
        Source: Lion Nathan
                           .

Details of these pre-bid arrangements are set out in section 8.3 of the Bidder’s Statement. Coopers considers that
these details disclose:
• an attempt by Lion Nathan to manipulate the Pre-Emptive Rights Regime in a manner detrimental to all
  Coopers’ Shareholders; and
• provide benefits to the above Shareholders that are not available to Shareholders under Lion Nathan’s Offer
  and, as such, unfairly discriminate between Shareholders.


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      PART C - 11. Pre-Emptive Rights Regime

Two types of pre-bid arrangements are described in the Bidder’s Statement:
(a)     Transfer Notice Arrangements. Under these arrangements Lion Nathan has paid Shareholders $260 per
        Share for the right to lodge a Transfer Notice on their behalf in order to activate the Pre-Emptive Rights
        Regime. If their Shares are subsequently sold, these Shareholders are required to refund Lion Nathan the
        amount received on the sale up to a maximum of $260 per Share (i.e. they may keep any difference).
        As of the date of this Target’s Statement, Coopers has received one Transfer Notice pursuant to these
        arrangements, being the Transfer Notice received from Mr Barry Schrapel on 1 September 2005 which is
        discussed in section 11.7.
        Lion Nathan, through these arrangements, has underwritten the risk that:
        • a person may elect to acquire the Shares specified in the Transfer Notice at the Fair Value to be
          determined by the Coopers auditor; and
        • that Fair Value may have been determined to be less than the amount specified in the Transfer Notice.
        Shareholders who accept the Offer do not obtain the benefit of this “underwriting”. They are exposed to
        the possibility that Fair Value will be different to the Offer Price (see section 10.4). In making any future
        determination of Fair Value, the Coopers auditor will be required to take into account facts and
        circumstances that exist at the time the determination is made including Coopers’ financial performance,
        whether the special resolution to be considered by the Requisitioned EGM has been approved, whether the
        Buy-Back resolutions have been approved and whether the ACCC has determined that the Lion Nathan
        Offer cannot proceed.
        Coopers’ principal objection to this arrangement is that Lion Nathan only offered this benefit to a small
        number of Shareholders rather than making it available to all Shareholders under its Offer. In doing so,
        Coopers considers that Lion Nathan has unfairly discriminated between Shareholders.
(b)     Purported Member’s Relative Arrangement. Under this arrangement, two Lion Nathan subsidiaries
        agreed to a series of transactions with Mr Barry Schrapel whereby one of the subsidiaries purported to
        become a Member’s Relative of Mr Schrapel in an attempt to take a transfer of 500 Shares from him in a
        manner that would bypass the Pre-Emptive Rights Regime.
        This arrangement is currently the subject of Court proceedings that have been initiated by Lion Nathan
        against Coopers and are discussed in section 16.5.
        Lion Nathan claims that the transferee is a Member’s Relative of Mr Schrapel because it has granted Mr
        Schrapel a relevant interest in all of the voting shares in the transferee. However, the relevant interest that
        it has granted is a very limited pre-emptive right over the shares in the transferee that Mr Schrapel must
        exercise on only 24 hours’ notice and a right to vote the shares but only at a meeting where a resolution to
        wind up the Lion Nathan subsidiary is being considered. Further, these limited rights expire after only one
        year.




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   PART C - 11. Pre-Emptive Rights Regime

       Coopers objects to this arrangement because Lion Nathan is not a Member’s Relative of Mr Schrapel. As
       such, the purported transfer to Mr Schrapel is one the Directors must refuse to register. The arrangement
       devised for Mr Schrapel is an attempt by Lion Nathan to manipulate the Pre-Emptive Rights Regime and
       deny Shareholders the opportunity under the first tier pre-emptive rights to acquire Shares in priority to
       Lion Nathan. Shareholders should be aware that Lion Nathan has agreed to indemnify Mr Schrapel against
       any cost or loss incurred by him as a result of any litigation brought in connection with this arrangement.



   11.10. Pre-Emptive Rights Regime and Lion Nathan’s Offer

The Pre-Emptive Rights Regime has an important impact on Lion Nathan’s Offer and its Terms of Offer which are
set out in appendix 1 of the Bidder’s Statement.
A Shareholder who is considering accepting the Offer should assess the following risks and other issues arising from
the Terms of Offer and the Pre-Emptive Rights Regime before it decides to accept the Offer.

What will be the immediate effect of my acceptance of the Offer?
Section 4 of the Terms of Offer sets out details of how you can accept the Offer. To accept the Offer, you must
complete and sign a Transfer Notice and send it to Lion Nathan. In doing so, you will become subject to a number
of important legal ramifications that are set out in clause 6.7 of the Terms of Offer.
• Transfer Notice. You authorise Lion Nathan and its agents to lodge your Transfer Notice with Coopers on your
  behalf. Under the Terms of Offer, you cannot revoke this authority.
   The Pre-Emptive Rights Regime will be activated when Lion Nathan lodges your Transfer Notice with
   Coopers.
• Share Transfer Form. You authorise Lion Nathan and its agents to complete and execute a transfer form on
  your behalf for any Shares that Lion Nathan becomes eligible to acquire from you and lodge it with Coopers.
  Under the Terms of Offer, you cannot revoke this authority.
• Future Representations and Warranties. You make representations and warranties to Lion Nathan about the
  future status of your Shares as detailed in clause 6.7(c) of the Terms of Offer.

Why is my acceptance of the Offer only deemed to be complete after Lion Nathan becomes
“eligible” to acquire my Shares?
Lion Nathan cannot acquire your Shares unless it becomes “eligible” to do so under the Coopers Constitution.
Clause 4.6 of the Terms of Offer stipulates that your acceptance of the Offer is conditional and will only be deemed
to be complete in respect of all or some of your Shares which are the subject of your Transfer Notice if Lion Nathan
becomes eligible to acquire those Shares under the Coopers Constitution and if other requirements of the clause
are met.




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    PART C - 11. Pre-Emptive Rights Regime

Lion Nathan has defined eligibility in respect of a Share to mean either:
• Coopers is required to offer that Share, and does offer that Share, to Lion Nathan under its third tier pre-
  emptive right; or
• Lion Nathan becomes eligible to acquire that Share under article 52 of the Coopers Constitution.
Before Lion Nathan can become eligible to acquire your Shares, the Directors must first endeavour to find
Shareholders or Member’s Relatives willing to purchase them and, failing sufficient takers, offer them for sale under
the second tier pre-emptive rights.

If I accept the Offer, will I receive $260 for each of my Shares?
Not necessarily. Before you can sell any of your Shares to Lion Nathan for the Offer Price of $260 per Share, the
Directors must first endeavour to find Shareholders or Member’s Relatives willing to purchase them and, failing
sufficient takers, offer them for sale under the second tier pre-emptive rights.
If any eligible person agrees to purchase your Shares under the first or second tier pre-emptive rights, you may
receive less than $260 per Share. This is because first and second tier pre-emptive rights holders have the option
of agreeing to acquire some or all of your Shares at the Fair Value to be determined by the Coopers auditor under
the Fair Value Mechanism. KPMG has recently determined the Fair Value of certain class C Shares to be $260 per
Share1. However, that determination related to a particular parcel of Shares only. In making any future
determination of Fair Value the Coopers auditor will be required to take into account facts and circumstances that
exist at the time it is made. If circumstances change (eg because Lion Nathan’s Offer lapses) there can be no
guarantee the Coopers auditor will reach a similar conclusion on Fair Value.
Once Fair Value is determined, you will be required to transfer those of your Shares which are the subject of the
Fair Value determination, unless the Directors allow you to revoke your Transfer Notice.

If I accept the Offer, when will my Transfer Notice be lodged with Coopers?
Coopers does not know when this will occur. Section 4.4 of the Terms of Offer states that following receipt of your
Transfer Notice, Lion Nathan will lodge it with Coopers. However, the Terms of Offer do not specify when Lion
Nathan will do this. Coopers requested that Lion Nathan commit to the “prompt” lodgement of all Transfer
Notices that it receives, but it has not done so. To date, Lion Nathan has not lodged Transfer Notices it received
as early as 8 September 2005, despite requests from Coopers to do so.
The time that Lion Nathan takes to lodge your Transfer Notice may have important ramifications for you on the
amount you receive for your Shares. This is because it delays the time at which any Fair Value determination will
be made, thus increasing the chance of a change to the circumstances on which Fair Value is based.




Notes:
1    You should note that this assessment relates only to the Shares that were the subject of a recent Transfer Notice. This assessment is not intended
     to be used by Coopers or any Shareholder nor is it intended to influence a person in making a decision in relation to Shares. Any future share
     transfers at Fair Value will be subject to a separate Fair Value determination. For details of the Fair Value Mechanism, see section 11.2.


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   PART C - 11. Pre-Emptive Rights Regime

Can I revoke my acceptance of the Offer?
Once you accept the Offer by sending a Transfer Notice to Lion Nathan, you cannot, without the consent of Lion
Nathan, prevent it being lodged with Coopers because you have irrevocably authorised Lion Nathan to lodge it
on your behalf.
Once a Transfer Notice has been lodged with Coopers it is irrevocable except with the consent of the Directors.
The Directors can only exercise their discretion to sanction the revocation of a Transfer Notice at the time at
which the relevant circumstances occur. In doing so, they must have regard to the interests of Coopers and take
into account the interests of both buyers and sellers of Shares. There can be no guarantee that the discretion to
permit revocation of a Transfer Notice will be exercised in any particular case.

Can I participate in the Buy-Back if I have accepted the Offer?
Once you accept the Offer for all or some of your Shares by submitting a Transfer Notice to Lion Nathan, you
cannot revoke your acceptance, without the consent of Lion Nathan, because you have irrevocably authorised
Lion Nathan to lodge your Transfer Notice with Coopers and to take other steps to accept the Offer. In those
circumstances, it will not be possible for you to participate in the Buy-Back in respect of those same Shares.




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   PART C - 12. Requisitioned EGM


Requisitioned EGM proposed to be held at 10am on Tuesday,
29 November 2005 to consider amending the Coopers Constitution to
remove references to Lion Nathan


   12.1.      Background to the Requisitioned EGM

On 8 September 2005, the Board received a requisition from Shareholders representing more than 5% of
Coopers’ Share capital requiring the Board to call an extraordinary meeting of Shareholders to consider and, if
thought fit, approve a special resolution to amend the Coopers Constitution. The effect of the amendment is
to delete all references to Lion Nathan, including its third tier pre-emptive right and a provision which deems
it not to be a competitor of Coopers.
Under the Corporations Act, the Directors are required to convene a general meeting within two months of
receiving such a requisition.
On 21 September 2005, the Board sent a notice of meeting and explanatory memorandum to Shareholders
convening the Requisitioned EGM for 20 October 2005 to consider the resolution.
On 27 September 2005, Lion Nathan commenced proceedings in the Federal Court of Australia, which granted
an injunction restraining the holding of the Requisitioned EGM on the date fixed, other than for the purpose
of adjourning it to another date but gave liberty to Coopers to apply to discharge the injunction upon 24 hours’
notice.
On 8 November 2005, Coopers applied for the injunction to be discharged and the Requisitioned EGM
reconvened. The Court hearing commenced on 11 November 2005 and has been adjourned until 16
November 2005. Lion Nathan is resisting the application. Subject to the discharge of the injunction, Coopers
intends to reconvene the Requisitioned EGM at 10.00am on Tuesday, 29 November 2005 and send a Notice
of Requisitioned EGM to Shareholders.




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   PART C - 12. Requisitioned EGM


   12.2.      Background to the Resolution

Articles 49, 50 and 51 of the Coopers Constitution contain a third tier pre-emptive right in favour of Lion
Nathan. The Pre-Emptive Rights Regime is described in section 11. The effect of the third tier pre-emptive
right is that when a person transfers their Shares, if a purchaser is not found under the first or second tier pre-
emptive rights, the Shares must be offered to Lion Nathan.
Article 143 of the Coopers Constitution forbids a Shareholder from being interested in any concern carrying
on business in competition with Coopers, or having interests inconsistent with those of Coopers, without the
consent of the Directors. Article 54 further provides that the Directors must refuse to register any transfer for
a Share where in accordance with article 143 the person might be required to retire as a Shareholder.
Therefore, a Shareholder could not transfer their Shares to a competitor of Coopers unless the Coopers
Constitution was first amended to permit the registration of that transfer.
In 1995, the Coopers Constitution was amended in the following manner:
• the application of article 143 of the Coopers Constitution was amended such that Lion Nathan is
  currently deemed not to be carrying on business in competition with Coopers and not to have interests
  which are inconsistent with those of Coopers;
• Lion Nathan was granted a third tier pre-emptive right under articles 38 to 54 of the Coopers
  Constitution; and
• regulations 6 and 7 of the Coopers Constitution entrenched the above articles by providing that they
  could not be amended except with the consent of Lion Nathan subject to regulation 8 which provides that
  if there is a change in control of Lion Nathan the entrenching provisions cease to have effect.
See section 11.5 for further information concerning the background to these amendments.
In April 1998, Kirin acquired 45% of the voting shares in Lion Nathan.
Coopers subsequently applied for a declaration from the Supreme Court of South Australia that the control
of Lion Nathan had changed within the meaning of the Coopers Constitution, with the consequence that
the Coopers Constitution could be amended to delete these provisions without Lion Nathan’s consent.
On 2 September 2005, the Supreme Court of South Australia held that there had been a change in control
of Lion Nathan. On 8 September 2005, Lion Nathan announced it was appealing this decision. The appeal
was heard by the Full Court of the Supreme Court of South Australia and on 19 October 2005 the Full Court
unanimously dismissed Lion Nathan’s appeal.
The effect of the Full Court’s decision is that Lion Nathan’s rights cease to be entrenched and Shareholders
are entitled to consider and, if thought fit, approve the removal of them from the Coopers Constitution.




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   PART C - 12. Requisitioned EGM


   12.3.      The Resolution

The precise form of the resolution proposed by the requisitioning Shareholders will be set out in the Notice
of Requisitioned EGM. The resolution is a special resolution which means that to be passed it requires the
approval of at least 75% of the total number of Shares voted at the meeting.
The Resolution contains a series of deletions from the Coopers Constitution which, if adopted have the effect
that:
• the third tier pre-emptive right in favour of Lion Nathan is deleted; and
• Lion Nathan’s exemption from the operation of article 143 of the Coopers Constitution will be removed.
  As a result Lion Nathan will no longer be deemed not to be carrying on business in competition with
  Coopers or not to have interests which are inconsistent with those of Coopers.


   12.4.      Challenges to the Requisitioned EGM

Lion Nathan has commenced proceedings alleging that the explanatory memorandum accompanying the
original notice of Requestioned EGM was misleading and incomplete.
Amongst other complaints, Lion Nathan alleges that the explanatory memorandum did not deal adequately
or at all with the application of section 140(2) of the Corporations Act.
Section 140(2) of the Corporations Act provides that amendments to a constitution that increase restrictions
on a shareholder's right to transfer shares only bind shareholders who consent in writing to the amendment.
Lion Nathan's argument appears to be based on the presumption that by removing Lion Nathan's rights, it is
harder for a Shareholder to transfer Shares.
It is Coopers’ view that this argument is incorrect and that the proposed amendment will bind all
Shareholders.
Lion Nathan has sought that the holding of the Requisitioned EGM be restrained until further order. Coopers
is resisting the proceedings.
Further details regarding current litigation are included in section 16.




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   PART C - 12. Requisitioned EGM


   12.5.     Consequences if resolution passed

If the resolution is passed at the Requisitioned EGM, there are a number of consequences that follow for
Shareholders both in relation to the operations of Coopers generally and specifically in relation to Lion
Nathan’s Offer.
Coopers considers the effect of approving the resolution would be to prohibit Lion Nathan from being
registered as a Shareholder without a further amendment to the Coopers Constitution.
In essence this means that unless the Coopers Constitution was amended again:
• Lion Nathan could not purchase Shares and seek to be registered as the holder of those Shares; and
• if Lion Nathan were to become registered as the holder of Shares, it could be required to sell those shares.
If another party sought to acquire Shares it would be able to do so without the Shares first being offered to
Lion Nathan under its third tier pre-emptive right. Effectively:
• this removes a power currently available to Lion Nathan under the Coopers Constitution to block third
  parties from become Shareholders and;
• Lion Nathan would be placed in the same position as all other competitors of Coopers. That is, it would
  not be able to acquire Shares without an amendment to the Coopers Constitution.
In practical terms, if the proposed resolution is approved, Lion Nathan’s Offer will not be available on its
current terms.
• The amendment to the Coopers Constitution will breach conditions of Lion Nathan’s Offer. It is a
  constitutional amendment, which Lion Nathan’s Offer prohibits and the Directors are of the view that, if
  the resolution is passed, they would not be able to satisfy the condition which requires these to give an
  irrevocable consent that Lion Nathan is not in breach of article 143 (see section 10.3 (h) for a discussion
  of that condition). Unless Lion Nathan waives these breaches, its Offer will lapse without becoming
  unconditional and Lion Nathan will not acquire any Shares, including those of Shareholders who have
  accepted its Offer.
• In its Bidder’s Statement, Lion Nathan has stated that it considers that if this resolution is approved
  Shareholders will be unlikely to receive the benefits of its Offer.
• Shareholders should understand that if the amendments are approved, Lion Nathan’s Offer will not be
  available, whereas if the amendments are not approved Shareholders will each have an opportunity to
  consider Lion Nathan’s Offer and the conditions attached to the Offer, as well as Coopers’ response on
  the basis of the information set out in the Bidder’s Statement and this Target’s Statement.




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    PART C - 12. Requisitioned EGM


    12.6.        Consequences if resolution not passed

If the proposed resolution is not passed the following consequences need to be considered by all Shareholders:
• Lion Nathan’s current rights under the Coopers Constitution would be preserved, that is, Lion Nathan
  would continue to have a third tier pre-emptive right and would continue to be deemed not to be a
  competitor of Coopers; and
• if through the exercise of its third tier pre-emptive right or through its Offer, it acquired Shares, Lion
  Nathan would:
     • become a Shareholder and be entitled to exercise first tier pre-emptive rights to acquire further Shares
       if they became available; and
     • be entitled to exercise the rights attached to its Shares in furtherance of its own interests, which may
       or may not coincide with the interests of other Shareholders.


    12.7.        What should you do?

The above information is only a brief overview of the Requisitioned EGM. You should read the Notice of
Requisitioned EGM in its entirety when it is sent to you.
If you are not sure what action to take you should consult your financial or other professional adviser.
All Shareholders are encouraged to attend the Requisitioned EGM and to cast their vote in relation to the
proposed resolution to amend the Coopers Constitution. If you cannot attend in person you should complete
and return the proxy that will accompany the Notice of Requisitioned EGM.
If you wish to reject Lion Nathan’s Offer and to remove Lion Nathan from the Coopers Constitution you
should vote in favour of the resolution.
If you wish to be able to consider Lion Nathan’s Offer you should vote against the resolution.
Those of your Directors who are Shareholders1, and the entities they control (representing 14.3% of
Shares) intend to vote in favour of the resolution.




Notes:
1    Glenn Cooper AM, Tim Cooper, William Cooper OAM and James Cooper.


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   PART C - 13. Buy-Back EGM


Buy-Back EGM to be held at 10.30am on Wednesday, 7 December 2005
         Buy-Back Proposal and Constitutional Amendment


   13.1.      The Buy-Back EGM

Shareholders will have received a Notice of Buy-Back EGM at the same time as they received this Target’s
Statement.
The Buy-Back EGM is to be held at 10.30am on Wednesday, 7 December 2005 at 461 South Road, Regency
Park, South Australia.
The business of the Buy-Back EGM is set out in the Notice of Buy-Back EGM and includes:
• a special resolution to amend the Coopers Constitution; and
• an ordinary resolution to approve a Buy-Back of up to 15% of the Shares at $260 per Share.
Both resolutions must be approved by the required majorities in order for the Buy-Back to proceed.
Shareholders are encouraged to attend and vote at the Buy-Back EGM. If you cannot attend in person you
should vote by proxy.
The following information is only a brief summary of the contents of the Notice of Buy-Back EGM.
Shareholders are encouraged to read the Notice of Buy-Back EGM in its entirety before deciding how to vote.
If you are not sure what action to take you should consult your financial or other professional adviser.


   13.2.      Resolution to amend the Coopers Constitution

The Notice of Buy-Back EGM includes a special resolution to amend the Coopers Constitution. The resolution
is a special resolution which means that to be passed it requires the approval of at least 75% of the total number
of Shares voted at the meeting.
If passed, the resolution will amend the definition of “transfer” in the Coopers Constitution to make it clear
that the term does not include a buy-back of Shares by Coopers.
It is Coopers’ view that this amendment does no more than make explicit the existing situation. Lion Nathan
has commenced proceedings against Coopers alleging that the 2003 Coopers Share Buy-Back was unlawful in
that the Shares bought back should have been first offered under the Pre-Emptive Rights Regime. The
resolution has been proposed to refute this allegation (which Coopers denies) being made in relation to the Buy-
Back. See section 16.3 for a description of the proceedings in relation to the 2003 Coopers Buy-Back.
The Board has proposed this particular constitutional amendment so as to try to avoid the cost and frustration
to Shareholders of further legal actions being brought by Lion Nathan and to avoid the Buy-Back being delayed
through attempts to link it with the 2003 Coopers Buy-Back proceedings.


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   PART C - 13. Buy-Back EGM


   13.3.     Resolution to approve the Buy-Back

The implementation of the Buy-Back is conditional upon Shareholder approval. The Directors are seeking
Shareholder approval for two reasons:
• because the Buy-Back is for 15% of issued Shares, it must be approved under section 257C(1) of the
  Corporations Act; and
• to allow Shareholders to decide if they want to proceed with an action that breaches one of the conditions
  to Lion Nathan’s Offer.
The fact that Lion Nathan has included a “no buy-back” Offer condition does not prevent the Company from
implementing a Buy-Back unless the Buy-Back is implemented for the purpose of frustrating the Offer.
The purpose of the Buy-Back is not to frustrate the Offer but to provide Shareholders with the liquidity
foreshadowed on 15 August 2005 and to take advantage of Coopers’ strong financial position to allow
Shareholders who wish to do so the chance to liquidate some or all of their holding.
However, because the Buy-Back has the consequence that it may allow Lion Nathan to lapse its Offer, your
Board will not proceed with the Buy-Back unless it is approved by a majority of Shareholders.
Lion Nathan’s Offer contains conditions at this time that (i) there must be no changes to the Coopers
Constitution, and (ii) there must be no prescribed occurrences. The definition of prescribed occurrences
includes entry by Coopers into a buy-back agreement. Accordingly, if Coopers proceeds with the Buy-Back
and Lion Nathan does not waive these Offer conditions, Lion Nathan’s Offer will lapse.


   13.4.     What happens if the resolutions are approved?

If the resolutions are passed, the Buy-Back will be implemented as set out in the Buy-Back Documents. It is
expected that cheques in payment for the Shares bought back will be distributed on or about 20 December
2005 (unless the Board extends the Buy-Back period).
After the Buy-Back has been implemented, Shareholders who did not participate in the Buy-Back will benefit
from a proportionate increase in their shareholding in line with the consequent reduction in overall number
of issued Shares. See section 15.3 for information on the proforma impact the Buy-Back will have on the
Director’s relevant interests in Shares.
The approval of the resolutions will breach conditions to Lion Nathan’s Offer. If Lion Nathan does not waive
these breaches, its Offer will lapse




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   PART C - 13. Buy-Back EGM


  13.5.      What happens if the resolutions are not approved?

If the resolutions are not approved, the Buy-Back proposal will be withdrawn for the duration of the Offer. It
remains your Board’s current intention, however, to implement more regular liquidity events for
Shareholders.




                                                                                                          95
   PART C - 14. Buy-Back details

                                  Alternative path to liquidity
  Coopers offers to buy-back up to 15% of all Shares for $260 per Share

   14.1.     Capital Management

Your Board indicated to you on 15 August 2005 that it was seeking to provide capital management
alternatives to Shareholders.
As part of the Board’s consideration of the Offer, Shareholders were contacted to determine whether they
were interested in selling some or all of their Shares. While many of you indicated that you would not
consider selling your Shares, Coopers is aware that some of you, while not wishing to accept Lion Nathan’s
Offer, want the opportunity to realise the value of some or all of your investment in Coopers.
The Board has now adopted a formal capital management policy. The purpose of this policy is to:
• provide ongoing liquidity options for Shareholders; and
• maintain an optimal capital structure and an appropriate level of gearing.
The capital management policy is to be implemented through an appropriate level of dividends and share
buy-backs and returns of capital.
The capital management policy provides for a review of liquidity options at least once each year after release
of the audited financial results. The level of liquidity in each year will be dependent upon the operating
requirements of the Company, its financial performance, gearing levels and maintenance of an appropriate
capital structure. The Board intends to provide capital management initiatives in respect of approximately
2.5% - 5.0% of issued capital, either through a buy-back or capital reduction, at least annually over the next
few years. The policy provides that liquidity will be offered at a price of $260 per Share adjusted up or down
in proportion to rises and falls in Coopers’ normalised EBITDA (see section 2.4).
The first liquidity event under this capital management policy is a buy-back of up to 15% of your Shares at
$260 per Share, as further described in this section 14.




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    PART C - 14. Buy-Back details


    14.2.     Summary of Buy-Back

Coopers is offering to buy-back up to 15% of all Shares at a price of $260 per Share. All Shareholders registered
at 5.00pm (Adelaide time) Tuesday, 6 December 2005 are entitled to participate in the Buy-Back in respect of
some or all of their Shares. If acceptances are received for more than 15% of Shares, acceptances will be scaled
back pro rata to the number of Shares tendered into the Buy-Back.
Assuming the Buy-Back is taken up in full, 203,003 Shares will be cancelled at a total cost to Coopers of $52.8
million.
The Buy-Back has been proposed because:
• Coopers’ financial position is strong and it is in a good position to offer capital management initiatives to
  Shareholders; and
• in talking to Shareholders about Lion Nathan’s Offer, the Board determined that although the
  overwhelming majority of Shareholders did not want to sell their Shares, there were a number of
  Shareholders who did not want to accept the Offer, but who would like to consider an opportunity to realise
  some or all of the value of their investment in Coopers.
The Buy-Back seemed to the Board to offer a positive outcome for all Shareholders. It provides:
• certainty of price;
• liquidity for Shareholders who desire it;
• proportionate increases in holdings for Shareholders who do not participate, with the increase expected to
  lead to better earnings per Share; and
•   an appropriate level of gearing.
The Buy-Back is conditional upon Shareholder approval at the Buy-Back EGM (see section 14.3).
Shareholders should read the Buy-Back Documents carefully, including the section describing tax consequences
of the Buy-Back, before deciding whether to participate in the Buy-Back. If you are in any doubt as to what
action to take in relation to the Buy-Back you should consult your financial or other professional adviser.




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    PART C - 14. Buy-Back details


    14.3.    Shareholder approval

The Buy-Back is conditional upon:
• at least 75% of Shareholders voting, in person or by proxy, at the Buy-Back EGM to amend the Coopers
  Constitution to allow buy-backs to proceed without reference to the Pre-emptive Rights Regime; and
• at least 50% of Shareholders voting, in person or by proxy, at the Buy-Back EGM to approve the terms
  of the Buy-Back offer.
Each of your Directors who holds Shares intends to vote in favour of the Buy-Back resolutions.
Section 13 describes the Buy-Back EGM and the reasons for the Buy-Back resolutions. In particular, it
describes the consequences to Lion Nathan’s Offer of voting in favour of the Buy-Back.




    14.4.    How to participate in the Buy-Back

Every person who is a registered holder of Shares at 5.00pm (Adelaide time) on Tuesday, 6 December 2005
is eligible to participate in the Buy-Back for all of the Shares registered in that person’s name as at that
date.
If you wish to participate in the Buy-Back you will need to complete and sign the acceptance form included
in the Buy-Back Documents. Acceptance forms together with share certificates for the Shares must be
returned to the Company so they are received no later than 5.00pm (Adelaide time) on Friday, 16
December 2005 (unless extended by the Board).
The actual number of Shares to be bought back will depend upon the number of acceptances received.
However, the maximum number of Shares to be bought back by Coopers will be 15% of Shares. If
acceptances under the Buy-Back exceed 15% of Shares, they will be scaled back pro rata to the number of
Shares tendered into the Buy-Back.
There is a risk that if acceptances are received in respect of more than 15% of Shares, the number of Shares
you wish to have bought back will be scaled back. Accordingly, Shareholders seeking 100% liquidity should
give consideration as to whether to accept the Buy-Back or Lion Nathan’s Offer. Lion Nathan’s Offer is
itself subject to a number of uncertainties which are described in section 10.
Shareholders who elect to participate in the Buy-Back will be notified in writing of the number of their
Shares which have been bought back and whether any scale back was applied. The Company intends to
send notices together with cheques in payment of the Shares bought back as soon as practicable after the
Buy-Back is approved by Shareholders and the close of the Buy-Back offer period. It is expected that this
will occur on or about 20 December 2005 (unless the Board extends the Buy-Back period).
.


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   PART C - 14. Buy-Back details


   14.5.     Voting

You will be entitled to vote your Shares even after you have returned your Buy-Back acceptance form. This
means you will be able to vote at the Requisitioned EGM and the Buy-Back EGM for all of your Shares.


   14.6.     Withdrawal

You may withdraw your acceptance at any time up until 5.00pm (Adelaide time) on Friday, 16 December
2005 (unless extended by the Board). After that time, your acceptance will be irrevocable. To withdraw your
acceptance, you must complete the withdrawal/amendment form included in the Buy-Back Documents.
Once you have accepted the Buy-Back offer, you will be deemed to have agreed to not deal with the number
of Shares for which you have accepted the Buy-Back. This means you will not be able to sell the Shares for
which you have accepted the Buy-Back to any other person unless you first amend or withdraw your
acceptance form.


   14.7.     Can I participate in the Buy-Back if I have accepted Lion
             Nathan’s Offer?

You will not be able to participate in the Buy-Back to the extent that you have already completed a Transfer
Notice and accepted Lion Nathan’s Offer for any of your Shares.

Under Lion Nathan’s Offer, once you complete a Transfer Notice, you may not withdraw that notice unless
the Offer lapses.

If the Transfer Notice has been served on the Company, you will not be able to withdraw the notice except
with the consent of Lion Nathan and Coopers’ Board.


   14.8.     Taxation

The Buy-Back will have different tax consequences for different Shareholders. Shareholders should consider
the description of the tax consequences of the Buy-Back set out in the Buy-Back Documents.




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   PART C - 14. Buy-Back details


   14.9.     What should you do?

You should carefully read the Buy-Back Documents and the Notice of Buy-Back EGM before deciding
whether to participate in the Buy-Back.
If you are uncertain of what action you should take you should consult your financial or other professional
adviser.
If you wish to participate in the Buy-Back you should:
• attend the Buy-Back EGM, in person or by proxy, and vote in favour of the resolution to amend the
  Coopers Constitution and the resolution to approve the Buy-Back; and
• return the acceptance form together with Share certificates in respect of the number of Shares you would
  like to have bought back to the Company no later than 5.00pm (Adelaide time) on Friday, 16 December
  2005.
If the Buy-Back proceeds, conditions to Lion Nathan’s Offer cannot be fulfilled. If Lion Nathan does not
waive the breach of the conditions, its Offer will lapse.
If you do not wish to participate in the Buy-Back you need take no action in relation to the acceptance form.
However, you are strongly encouraged to vote at the Buy-Back EGM, in person or by proxy, in relation to
whether the Buy-Back should proceed.


 Your Directors (except David Kingston, who has a conflict of interest as outlined in
 section 15.1 and is therefore unable to make a recommendation) recommend that
 Shareholders vote to approve the Buy-Back resolutions.




100
PART D


15   Directors’ recommendation and interests




                                               101
   PART D - 15. Directors’ recommendation and interests


   15.1.     Recommendation on Lion Nathan’s Offer

The directors of Coopers are:
• Mr Glenn Cooper AM (Chairman)
• Dr Tim Cooper (Managing Director)
• Mr William Cooper OAM (Former Managing Director)
• Dr James Cooper
• Mr David Kingston
• Mr Cameron Pearce

 Each Director (except David Kingston, who has a conflict of interest as outlined
 below and is therefore unable to make to make a recommendation) recommends that
 you REJECT Lion Nathan’s Offer, for the reasons set out in section 2.
David Kingston is the sole shareholder and director of K Capital Pty Ltd, which has a consulting arrangement
with Rothschild, Coopers’ financial adviser.
Under that consulting arrangement, K Capital is entitled to receive fees from Rothschild calculated on a basis
which takes into account fees which may be payable by Coopers to Rothschild in connection with Lion
Nathan’s Offer in certain circumstances.
Accordingly, Mr Kingston has a conflict of interest and is unable to make a recommendation to Shareholders
in this Target’s Statement as to how to deal with Lion Nathan’s Offer.
Mr Kingston did not participate in the preparation of this Target’s Statement other than in relation to this
statement and the statements in sections 15.3 and 15.6 specifically attributed to him. Further, Mr Kingston
abstained from voting on the resolution authorising this Target’s Statement and was not present at the Board
meeting at which it was authorised.
In considering whether you wish to follow the above recommendation, your Directors encourage you to:
• read the whole of this Target’s Statement;
• read the whole of the Notice of Buy-Back EGM, Buy-Back Documents and Notice of Requisitioned EGM;
• have regard to your individual risk profile, investment strategy, tax position and financial circumstances;
• obtain independent financial and taxation advice if you believe that may be necessary; and
• consider your options as a Shareholder set out in section 10.9.

 Each Director intends to REJECT Lion Nathan’s Offer in respect of the Shares held
 by him or on his behalf.



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    PART D - 15. Directors’ recommendation and interests


    15.2.          Recommendation on the Requisitioned EGM and the Buy-Back
                   EGM

Information concerning the recommendations and intentions of your Directors in relation to the business to be
considered at the Requisitioned EGM and the Buy-Back EGM are set out in the documents that accompany the
respective notices for those meetings. The business to be considered at the Requisitioned EGM is discussed in
section 12. The business to be considered at the Buy-Back EGM is discussed in section 13.


    15.3.          Relevant interests and dealings in Coopers’ Shares

The class A, class B, class C and class D Shares are the only marketable securities Coopers has on issue.
At the date of this Target’s Statement, the Directors had the following relevant interests in Shares:


        Director                        Beneficial   Immediate            No               Total          Total as %       Proforma total
                                        Interest1     Family 2         Beneficial                          of issued       as % of issued
                                                                       Interest 3                           capital           capital4

Mr Glenn Cooper AM                       31,883         3,791               -              35,674             2.6%              3.1%
Dr Tim Cooper 5                           6,916         6,000               -              12,916             1.0%              1.1%
Mr William Cooper OAM 5                  99,376        75,976            85,410           260,762            19.3%             22.7%
Dr James Cooper                          54,748        12,500               -              67,248             5.0%              5.8%
Mr David Kingston                             -             -               -                   -                 -                 -
Mr Cameron Pearce                             -         4,649               -               4,649             0.3%              0.4%

                                        192,923      102,916             85,410           381,249            28.2%             33.1%

Source: Coopers’ register of members.
1    Shares in this category comprise those in which the Director has a beneficial interest. They include Shares held by the Director in his
     own right, Shares held through body corporates or trusts in which the Director has an interest and Shares in estates in which the
     Director has a beneficial interest.
2    Shares in this category comprise those held by each Director’s spouse, children, children-in-law and grandchildren.
3    Shares in this category comprise those held by Mr William Cooper OAM as executor of a deceased estate. Neither he nor any member
     of his family has a beneficial interest in these Shares.
4    The proforma total as % of issued capital gives proforma effect to the Buy-Back assuming it is taken up in full with a consequent
     cancellation of 203,003 Shares and also assuming no Shares are tendered into the Buy-Back in which Directors have a relevant interest.
5    Dr Tim Cooper and Mr William Cooper OAM claim an interest in an additional 9,288 and 35,000 Shares respectively in contested
     probate proceedings in the Supreme Court of South Australia. An administrator has been appointed by the Court over these Shares
     but cannot vote or sell them without a further order of the Court.

No Shares were acquired or disposed of by or on behalf of any Director in the four month period preceding
the date of this Target’s Statement, other than the disposal of 16 Shares by Dr Tim Cooper to Medibrew Pty
Ltd, a Member’s Relative of Dr Tim Cooper.

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    PART D - 15. Directors’ recommendation and interests


    15.4.         Lion Nathan’s misleading table of relevant interests

On page 10 of its Bidder’s Statement, Lion Nathan included a table which purported to show increases in the
relevant interests of Directors over a 13-year period (30 June 1992 to 30 June 2005). Coopers believes Lion
Nathan has included the table to suggest that the Directors have increased their holdings of Shares at the
expense of other Shareholders. That suggestion is false. Coopers advised Lion Nathan that the table was
highly misleading, with its principal objections being that Lion Nathan:
• claims to show an increase in Directors’ relevant interests as a proportion of total issued Shares but
  REFUSES to adjust for reductions in issued Shares caused by the 1995 Coopers Capital Reduction and
  the 2003 Coopers Share Buy Back and, therefore, INFLATES the increase in Directors’ relevant interests
  during the comparison period;
• claims to show an increase in Directors’ relevant interests but REFUSES to adjust for changes in the
  relevant interest reporting basis during the comparison period and, therefore, INFLATES the increase in
  Directors’ relevant interests during that time;
• claims to show an increase in relevant interests by the current Directors but REFUSES to report upon a
  consistent set of individuals and, therefore, INFLATES the increase in relevant interests by including the
  increase that occurred as a result of Dr Tim Cooper and Mr Cameron Pearce joining the Coopers’ Board
  and;
• purports to show an implied value of Directors’ interests at various times during the comparison period but
  REFUSES to adjust for relevant interests in which Directors do not have a beneficial interest and,
  therefore, INFLATES the implied value of their interests.
Coopers asked Lion Nathan to delete or amend its misleading table and provided substantial information to
Lion Nathan for the purposes of demonstrating its misleading nature. Lion Nathan refused to accept that its
table was misleading and merely included some of the information provided by Coopers in its table footnotes.
Set out below is a similar table of Directors’ interests for the same 13-year comparison period but which takes
into account the adjustments that Lion Nathan refused to make.
                                  Directors’ Relevant Interests as at June 30
                                        1992           1995          2000              2005          Change
Directors’ relevant interests1, 2, 3               230,845              265,615              286,251                   295,839                +64,994
% of total issued Shares4                           17.1%                19.6%                21.2%                     21.9%                  +4.8%
Source: Coopers’ 1992, 1995, 2000 and 2005 annual reports and Coopers’ register of members.
1   Directors’ relevant interests data reflects the adjusted aggregate relevant interests of the current Directors as at the dates specified. Dr Tim Cooper and
    Mr Cameron Pearce became Directors on 22 October 1997 and 31 January 2002 respectively. The 1992, 1995 and 2000 relevant interests data has
    been adjusted by 3,600, 6,649 and 4,649 Shares respectively to account for the relevant interests held by them on those dates, which were not otherwise
    included in the relevant interests of other Directors at those times.
2   The 1992 Directors’ relevant interests data has been adjusted by 208,901 Shares to account for Shares which were not included in the data as at that
    date but would have been included had the relevant data been calculated on a reporting basis consistent with the reporting basis used for the 2005
    Directors’ relevant interests data.
3   The relevant interests data has been adjusted by eliminating 85,410 Shares held by the Estate of Mr DC Cooper. Mr William Cooper OAM holds those
    Shares in his capacity as executor of the estate but neither he nor any member of his family has a beneficial interest in them.
4   The 1992, 1995 and 2000 issued Share data gives pro forma effect to the following transactions as if they occurred prior to 30 June 1992: (i) the
    cancellation of 371,353 Shares (representing 21.2% of then issued capital) held by Southcorp pursuant to the 1995 Coopers Capital Reduction; and
    (ii) the cancellation of 30,259 Shares (representing 2.2% of then issued capital) pursuant to the 2003 Coopers Share Buy-Back.

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   PART D - 15. Directors’ recommendation and interests


   15.5.     Relevant interests and dealings in Lion Nathan securities

No Director has a relevant interest in any marketable securities of Lion Nathan or acquired or disposed of any
marketable securities of Lion Nathan within the four month period preceding the date of this Target’s
Statement.


   15.6.     Conditional agreements

Aside from the consulting arrangement involving K Capital which is discussed in section 15.1, there are no
agreements between any Director and any other person in connection with or conditional on the outcome of
Lion Nathan’s Offer.


   15.7.     Contracts with Lion Nathan

No Director has any interest in any contract entered into by Lion Nathan.


   15.8.     Benefits

As a result of the Offer, no benefit (other than a benefit permitted by section 200F or 200G of the
Corporations Act) has been or will be given to a person:
• in connection with the retirement of a person from a board or managerial office in Coopers or a related
  body corporate of Coopers; or
• who holds, or has held, a board or managerial office in Coopers or a related body corporate of Coopers, in
  connection with the transfer of the whole or any part of the undertaking or property of Coopers.




                                                                                                        105
   PART D - 15. Directors’ recommendation and interests


   15.9.      Insurance and Indemnities

Coopers has entered into standard form deeds of indemnity with each Director against all liabilities which they
incur in or arising out of:
• the conduct of the business affairs of Coopers or its affiliates;
• any act or omission in relation to the business or affairs of Coopers or its affiliates; and
• the performance of, the manner of performance of, or the failure to perform, duties or responsibilities in
  relation to Coopers, its affiliates or their respective business or affairs,
except liability to Coopers or a related body corporate, liability for a pecuniary penalty or compensation order
under the Corporations Act and liabilities arising from conduct involving a lack of good faith. Coopers is
obliged to meet the full amount of all such liabilities in accordance with the terms of the deeds of indemnity.
Coopers holds a Directors’ and Officers’ Liability and Company Reimbursement Policy on behalf of current
directors and officers of Coopers and its subsidiaries. The period of the policy extends from 2 March 2005 to 2
March 2006.




106
PART E


16   Material litigation


17   Takeovers Panel proceedings


18   Additional information




                                   107
   PART E - 16. Material litigation


   16.1.     Overview

Coopers is presently involved in litigation in a number of jurisdictions brought by Lion Nathan and two
individuals whose litigation is funded by Lion Nathan. Coopers has also recently been involved in litigation
with Lion Nathan concerning the right of Shareholders to amend the Coopers Constitution.
A summary of the current status of those proceedings as at the date of this Target’s Statement is set out below.



   16.2.      South Australian Supreme Court proceedings – “Change in
              Control” of Lion Nathan

As described in section 11.5, as part of the settlement of disputes between Coopers and Lion Nathan, the
Coopers Constitution was amended in 1995. As a result of these amendments, Lion Nathan was granted a
third tier pre-emptive right under the Coopers Constitution. Additionally, Lion Nathan was deemed not to
be a competitor of Coopers and was exempted from the restriction on Shareholders having an interest in
businesses in competition with that of Coopers. These rights granted to Lion Nathan could not be removed
without the consent of Lion Nathan unless there was a “Change in Control” of Lion Nathan.
In April 1998, Kirin acquired 45% of the voting shares in Lion Nathan and Coopers considered that this
acquisition constituted a “Change in Control” such that the Coopers Constitution could now be amended to
remove these provisions. This was challenged by Lion Nathan. Coopers sought declarations from the
Supreme Court of South Australia that its interpretation was correct and that as a consequence, there was no
longer a legal impediment to the convening of an extraordinary general meeting for the purpose of
considering a special resolution to remove these provisions (as well as other references) to Lion Nathan from
the Coopers Constitution.
On 2 September 2005, Justice Perry in the Supreme Court made the declarations sought by Coopers.
Lion Nathan subsequently appealed that decision to the Full Court of the Supreme Court of South Australia.
On the application of Coopers (which application was opposed by Lion Nathan) that appeal was given an
expedited hearing. On 19 October 2005, the Full Court unanimously dismissed Lion Nathan’s appeal and
affirmed the original decision of Justice Perry.
The effect of this decision was to confirm that there was no impediment under the Coopers Constitution to
a special resolution being passed to delete the references to Lion Nathan in the Coopers Constitution. Subject
to the injunction restraining the holding of the Requisitioned EGM being discharged (see section 16.4), a
special resolution to this effect will be considered at the Requisitioned EGM (see section 12 for further
information).




108
   PART E - 16. Material litigation


   16.3.      South Australian Federal Court proceedings by Lion Nathan –
              2003 Coopers Share Buy-Back

On 28 June 2005, Lion Nathan commenced proceedings in the Federal Court of Australia, South Australia
District Registry, against Coopers and a number of Shareholders and former Shareholders alleging that the 2003
Coopers Share Buy-Back was in breach of the Coopers Constitution, in that the Shares bought back were not first
offered under the Pre-Emptive Rights Regime and that the conduct of Coopers in relation to the buy-back
involved misleading and deceptive conduct in failing to state that the buy-back was subject to the Pre-Emptive
Rights Regime. Coopers denies Lion Nathan’s allegations and is defending the Lion Nathan proceedings. Lion
Nathan is seeking orders reinstating the Shares sold into the buy-back. The other respondents are the Shareholders
and former Shareholders who sold Shares back to Coopers. They are joined on the basis that, if the relief sought
is granted, they would be affected by it.
Of the sixteen Shareholders and former Shareholders joined, one (Andrew Short), has expressed a desire to be
heard in the matter.
Mr Short, funded by Lion Nathan, has initiated a cross-claim against Coopers. He alleges (and it is disputed by
Coopers) that Coopers knew or ought to have known that Lion Nathan was a potential purchaser of Shares at the
time of the buy-back, and that is information that should have been conveyed by Coopers to its auditors, KPMG,
for consideration by them in determining fair market value for the Shares at that time. By not doing so, Mr Short
alleges that Coopers failed in its duty to him.
Coopers has applied to strike out the cross-claim on the basis that the maintaining of the claim when funded by
Lion Nathan, who on the face of it has no appropriate interest in the litigation, is an abuse of the process of the
Court. Coopers sought to have this application heard at the earliest opportunity. That application was opposed by
Mr Short and that issue will now be determined as part of the formal trial proceedings which are yet to be listed.
Contrary to an assertion in the Bidder’s Statement, Lion Nathan has not sought to amend its claim so as to raise
any other issues.


   16.4.      Victorian Federal Court proceedings by Lion Nathan –
              Requisitioned EGM

As a consequence of a requisition received by Coopers on 5 September 2005 from Shareholders who together held
more than 5% of all Shares, Coopers gave notice convening the Requisitioned EGM for the purposes of
considering, and if though fit, approving a special resolution to amend the Coopers Constitution to delete
references to Lion Nathan, including its third tier pre-emptive right and the provision which deems it not to be a
competitor of Coopers.
On 21 September 2005, the Board sent a notice of meeting and explanatory memorandum to Shareholders
convening the Requistioned EGM for 20 October 2005 to consider the resolution. On 27 September 2005, Lion
Nathan commenced proceedings in the Federal Court of Australia, Victoria District Registry, against Coopers and
the Directors, seeking to restrain the holding of the Requisitioned EGM.

                                                                                                             109
   PART E - 16. Material litigation

On 11 October 2005, the Federal Court granted an injunction restraining the holding of the Requisitioned
EGM on the date then fixed, other than for the purpose of adjourning it to another date. However, the
Federal Court gave liberty to Coopers to apply to discharge the injunction upon 24 hours’ notice.
On 8 November 2005, Coopers applied for the injunction to be discharged and the Requisitioned EGM
reconvened. Lion Nathan is resisting the application. The court hearing commenced on 11 November 2005
and Justice Goldberg has adjourned the matter until 16 November 2005. If the injunction is discharged, a
Notice of Requisitioned EGM will be sent to Shareholders shortly for a meeting to be held at 10.00am on
Tuesday, 29 November 2005.



   16.5.     Victorian Federal Court proceedings by a Lion Nathan
             subsidiary

On 27 September 2005, a wholly owned subsidiary of Lion Nathan commenced proceedings in the Federal
Court of Australia, Victoria District Registry, seeking an order requiring Coopers to register a transfer of
Shares to it by a Shareholder, Barry Schrapel, the same Shareholder who has commenced his own proceedings
in the Federal Court of Australia, South Australia District Registry (see section 16.6).
Although a wholly owned subsidiary of Lion Nathan, it is the assertion in those proceedings, that by virtue
of certain agreements entered into between that subsidiary and Mr Schrapel, the subsidiary is a Member’s
Relative of Mr Schrapel and thereby entitled to registration as a Shareholder without proceeding through the
Pre-Emptive Rights Regime.
Coopers disputes those claims, asserting that in substance, the Lion Nathan subsidiary is not a Member’s
Relative of Mr Schrapel and in any event is precluded from being registered because it is ultimately controlled
by Kirin, a competitor of Coopers.
In those proceedings, the Lion Nathan subsidiary sought an interlocutory injunction to restrain the holding
of the Requisitioned EGM. That application was heard by the Federal Court and dismissed.
The substantive proceedings have not yet been given a trial date.




110
   PART E - 16. Material litigation


   16.6.      South Australian Federal Court proceedings by Barry Schrapel

This is an action brought by Barry Schrapel against Coopers and the Directors over their handling of his Transfer
Notice for 6,000 class C Shares. Mr Schrapel is seeking declarations as to the manner in which the Pre-Emptive
Rights Regime should be applied. He is alleging that the Directors have conducted the affairs of Coopers otherwise
than in the best interests of Shareholders generally. Coopers and the Directors dispute Mr Schrapel’s claims. They
assert that they have acted lawfully and in accordance with their duties.
In his claim, Mr Schrapel also seeks injunctions restraining the holding of the Requisitioned EGM. Mr Schrapel
has not however pursued his applications for injunctive relief at this time.
Mr Schrapel is funded in his litigation by Lion Nathan. He is represented by Lion Nathan’s solicitors. It is alleged
by Coopers that, as a consequence of an agreement between Lion Nathan and Mr Schrapel, Mr Schrapel has no
real financial interest in these proceedings.
No trial dates have currently been set.




                                                                                                              111
   PART E - 17. Takeovers Panel proceedings


   17.1.     Coopers Brewery Limited 01

On 2 September 2005, Coopers made an application to the Takeovers Panel in relation to a letter dated 1
September 2005 sent by Lion Nathan to Shareholders announcing its Offer. Coopers alleged that the letter
was misleading and deceptive because it failed to adequately explain that Shareholders wishing to accept the
Offer could not do so without following the Pre-Emptive Rights Regime and, as a result, may receive less than
the Offer Price because of the operation of the Fair Value Mechanism. (A description of the Pre-Emptive
Rights Regime and the Fair Value Mechanism is set out in section 11.)
The Takeovers Panel stated that it was concerned that Shareholders may have been confused by
communications they received as to the operation of the Pre-Emptive Rights Regime. However, it declined
to commence proceedings on the basis of an undertaking made by Lion Nathan to send a letter to
Shareholders explaining, as far as practicable, the operation of the Pre-emptive Rights Regime as it may
operate in the context of the Offer. Lion Nathan issued this letter on 21 September 2005.
Although invited by the Takeovers Panel to do so, Coopers declined to issue a joint letter with Lion Nathan
because Coopers’ Board was of the view that sending a joint letter with a bidder whose bid they were not
recommending would send a confusing message to Shareholders and they did not think they could agree a
form of words with Lion Nathan as to how the Pre-Emptive Rights Regime may operate in relation to Lion
Nathan’s Offer. Coopers was afforded only a limited opportunity to comment on the Lion Nathan letter and
many of the changes it sought were not made. Coopers does not sanction the interpretation of the Pre-
emptive Rights Regime set out in the Lion Nathan letter of 21 September 2005.


   17.2.     Coopers Brewery Limited 02

On 9 September 2005, Lion Nathan made an application to the Takeovers Panel concerning statements made
by the Coopers Board regarding the Offer and its recommendation that Shareholders reject it. Lion Nathan
alleged that the Coopers Board had made conflicting statements about the Offer and the way it interacted
with the Pre-emptive Rights Regime. Lion Nathan sought orders requiring corrective disclosure and orders
seeking to set aside the Fair Value Mechanism or, alternatively, an order requiring the Coopers Auditor,
KPMG, to conclude that Fair Value could not be less than the Offer Price.
The Takeovers Panel declined to commence proceedings on the basis that there was no real likelihood made
out by Lion Nathan that the public statements by the Coopers Board had caused unacceptable circumstances.
The Takeovers Panel stated that these statements were not likely to mislead or confuse Shareholders.
The Takeovers Panel noted that the Directors were subject to a fiduciary duty to act in good faith in the best
interest of Coopers as a whole and not to use their powers to advantage some Shareholders as against others.
It found that there was no evidence before the Takeovers Panel to support the view that the Directors had or
may breach their fiduciary duties in relation to the manner in which they implement the Pre-Emptive Rights
Regime in relation to the Offer.



112
   PART E - 18. Additional information


   18.1.      Coopers’ financial position

On 30 September 2005, Coopers released its results for the year ended 30 June 2005. Details of these results
are set out in section 7. Except as disclosed in this Target’s Statement, the financial position of Coopers has
not, to the knowledge of the Directors, materially changed since 30 June 2005.
Coopers has a superannuation scheme for certain employees and senior executives which includes targeted
retirement benefits. Although the scheme is not a true defined benefit scheme, in that it does not guarantee
a fixed sum of superannuation on retirement, it does provide for targeted payouts, being a multiple of final
salary. In December 2003, Coopers received an actuarial report which indicated the present value of
additional contributions required to fund the targeted benefits was $1.4 million. The actuarial report set out
a schedule of increased payments the actuary recommended be made by Coopers in order to fund this liability.
Coopers increased its contributions in accordance with the actuarial advice and those increased contributions
are reflected in the accounts. Coopers has not obtained a further actuarial report since 2003 to determine
whether the targeted benefits are under funded, fully funded or even, in light of recent stock market returns,
overfunded.


   18.2.      Coopers Shares

As at the date of this Target’s Statement, there are 1,353,358 Shares on issue, comprising:
• 15,553 class A Shares;
• 15,953 class B Shares;
• 1,234,761 class C Shares; and
• 87,091 class D Shares.
Under the Coopers Constitution, each class of Share has different Director appointment rights. See section
10.3 for a description of these rights.
As at the date of this Target’s Statement, there are no options to subscribe for Shares or other securities that
are convertible into Shares on issue from Coopers and there are no other arrangements, agreements or
undertakings which have, or which may have, the effect of increasing the number of Shares on issue.


   18.3.      Material Agreements

Coopers is a party to a number of Material Agreements that contain provisions that may entitle a person to
exercise rights (including the right to terminate, vary, transfer or redeem such an agreement) as a result of the
Offer. Coopers has also entered into Material Agreements with entities that it considers to be worldwide
competitors of Coopers or Lion Nathan. A summary of the relevant agreements is set out below.
Other than as set out below, as at the date of this Target’s Statement:
• Coopers has not entered into, agreed to enter into or offered to enter into any other Material Agreement
   with any worldwide competitor of Coopers or Lion Nathan; and
• no other person has become entitled to exercise any rights under a Material Agreement (including the
   right to terminate, vary, transfer or redeem such an agreement) as a result of the Offer.
                                                                                                           113
      PART E - 18. Additional information

(a)     Manufacturing and Distribution Agreement - Birell
        Coopers and Carlsberg entered into this Material Agreement on 6 August 2002 and it is due to expire
        on 30 September 2006 unless renewed. Under the agreement, Carlsberg granted to Coopers the
        exclusive manufacturing and distribution rights in Australia and New Zealand for Carlsberg’s ultra
        light beer known as “Birell”.
        Carlsberg may terminate this agreement on 3 months’ written notice if Coopers becomes owned or
        controlled in whole or in part by any company whose products compete with “Birell”.
        Coopers considers Carlsberg to be a worldwide competitor of both Coopers and Lion Nathan. Further,
        Coopers considers that, should Lion Nathan acquire ownership or control of Coopers as a result of the
        Offer or otherwise, Carlsberg may claim that Lion Nathan’s light beer products compete with Birell
        and that it is, therefore, entitled to terminate its agreement with Coopers.
(b)     Premium Shareholders Agreement
        Coopers and American Beverages entered into this Material Agreement on 18 December 2002. It sets
        out the terms on which their Premium Beverages joint venture is established and operated. Premium
        Beverages (which is 80% owned by Coopers and 20% by American Beverages) has licences to
        distribute Budweiser products throughout Australia and Coopers’ products throughout Australia
        (except in South Australia and the Northern Territory).
        Under the agreement, American Beverages has the right to acquire Coopers’ shares in Premium
        Beverages at a price to be fixed by an independent auditor if Coopers undergoes a change of control.
        For the purposes of this agreement, a change of control would occur if Lion Nathan either obtains 50%
        or more of the votes that may be cast at a general meeting of Coopers, obtained 50% or more of the
        issued share capital of Coopers or ultimately obtained the power to control the composition of
        Coopers’ Board.
(c)     Premium Distribution Agreement
        Coopers and Premium Beverages entered into this Material Agreement on 18 December 2002 and it
        is due to expire on 1 January 2007 although the parties are currently completing documentation of an
        extension of this term through to 30 June 2010. Under the agreement, Coopers grants Premium
        Beverages the right to distribute Coopers’ products throughout Australia (except in South Australia
        and the Northern Territory).
        This agreement can be terminated by Coopers if there is a ‘change of control’ in Premium, American
        Beverages or Coopers (as the ultimate holding company of Premium Beverages). For the purpose of
        this agreement, a ‘change of control’ in relation to a person means changes to the following as a result
        of a transfer (of legal or beneficial ownership), issue or cancellation of or variation of rights attaching
        to shares in or any other change in the capital structure:
        • a person who has the ultimate power to control the composition of its board of directors or its
            ultimate holding company;
        • a person who has ultimate power to control the casting of more than 50% of the issued share capital
            (excluding any part of that issued share capital that carries no right to participate beyond a
            specified amount in a distribution of either profits or capital) of it or its ultimate holding
            corporation; or
        • its ultimate holding corporation.

114
      PART E - 18. Additional information

(d)     Distribution Agreement - Budweiser
        Premium Beverages and Anheuser-Busch entered into this Material Agreement on 7 April 2005 and
        it is due to expire on 31 December 2009 unless renewed. Under the agreement, Anheuser-Busch
        granted to Premium Beverages the exclusive distribution rights in Australia for Budweiser beer.
        Coopers considers Anheuser-Busch to be a worldwide competitor of both Coopers and Lion Nathan.
(e)     ANZ Finance Facilities
        Coopers has finance facilities with ANZ which provide for $14.2 million in aggregate borrowing
        capacity. These facilities are governed by a letter of offer dated 21 April 2005.
        The letter of offer states that where a change of control occurs in Coopers without ANZ’s consent,
        ANZ will be entitled to terminate the facilities that are covered by the letter of offer. A change of
        control occurs where, in ANZ’s opinion, effective control of Coopers or any surety of Coopers or its
        subsidiaries is altered to any material extent from that subsisting at the date the Offer Letter.
(f)     Executive Service Agreements
        The executive service agreements between Mr Glenn Cooper AM, Dr Tim Cooper and Mr Haydn
        Duffield each include a provision which entitles the executive to terminate his contract in the event
        of a change of control in Coopers. For this purpose, a change of control occurs if a person becomes
        entitled to 35% of the issued capital of Coopers and, as a consequence, there is a change in half the
        members of the Board, including the Chairman. If the executive terminates his employment in those
        circumstances, he is entitled to a termination payment based in part upon the executive’s salary and
        superannuation entitlements. The current aggregate amount payable if all three executives elected to
        exercise their termination rights would be $4.19 million.


      18.4.   Taxation considerations for Shareholders

Section 7 of the Bidder’s Statement sets out advice on the Australian income tax, capital gains tax and stamp
duty consequences of accepting the Offer.
Shareholders should consult their own tax advisers for tax advice tailored to their own particular
circumstances. Shareholders should not rely solely on section 7 of the Bidder’s Statement in relation to the
taxation implications of accepting the Offer. In particular, Shareholders who are subject to taxation outside
Australia should obtain their own advice as to the tax consequences for them of Lion Nathan’s Offer, which
may be different to those applicable to Australian resident Shareholders.


      18.5.   Consents

The following persons have given and have not, before the date of this Target’s Statement, withdrawn their
consent to:
• be named in this Target’s Statement in the form and context in which they are named;


                                                                                                        115
   PART E - 18. Additional information

• the inclusion of their respective reports or statements (if any) noted next to their names and the
  references to those reports or statements in the form and context in which they are included in this
  Target’s Statement; and
• the inclusion of other statements in this Target’s Statement which are based on or referable to statements
  made in those reports or statements, or which are based on or referable to other statements made by those
  persons in the form and context in which they are included.


 Name of Person                        Named as                              Reports or statements

 Allens Arthur Robinson                Legal adviser                        N/A
 Ernst & Young                         Independent Accountant               Sections 2.1 and 7 and
                                                                            appendix 2             Grant
 Samuel                                Independent Expert                   Chairman’s letter,
                                                                            sections 2.3, 4 and 7 and
                                                                            appendix 1
 KPMG                                  Coopers’ auditor                     Chairman’s letter,
                                                                            sections 2.1, 2.6, 5, 10.2, 10.4,
                                                                            11.1, 11.2, 11.10 and 18.6
 KPMG Corporate Finance                N/A                                  Sections 11.2 and 18.6
 Piper Alderman                        Legal adviser                        N/A
 Rothschild                            Financial adviser                    N/A
 Simtac Pty Limited                    N/A                                  Sections 2.1 and 6


Each of the above persons:
• does not make, or purport to make, any statement in this Target’s Statement other than those statements
  referred to above and as consented to by that person; and
• to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of
  this Target’s Statement other than as described in this section with the person’s consent.
As permitted by ASIC Class Order 01/1543, this Target’s Statement may include or be accompanied by
certain statements which are made, or based on statements made, in documents lodged with ASIC or the
ASX. Pursuant to this Class Order, the consent of persons such statements are attributed to is not required
for the inclusion of such statements in this Target’s Statement.
Any Shareholders who would like to receive a copy of any of the documents (or parts of documents) that
contain statements which have been included pursuant to Class Order 01/1543 may obtain a copy free of
charge by contacting Haydn Duffield, Company Secretary, on (08) 8440 1860, Monday to Friday between
9.00am and 5.00pm (Adelaide time).




116
   PART E - 18. Additional information

As permitted by ASIC Class Order 03/635, this Target’s Statement may include or be accompanied by certain
statements:
• fairly representing a statement by an official person; or
• from a public official document or a published book, journal or comparable publication.
Pursuant to this class order, the consent of persons such statements are attributable to is not required for the
inclusion of such statements in this Target’s Statements.



   18.6.      ASIC relief

Under the Coopers Constitution, it is KPMG, in its capacity as Coopers’ auditor, that may be called upon to
certify the Fair Value of Shares. KPMG recently made a determination of the Fair Value of certain class C
Shares.
KPMG does not hold an Australian Financial Services Licence (AFSL) and received advice that in order to
provide information regarding its Fair Value determination in this Target’s Statement an AFSL was required.
KPMG sought and obtained relief under section 911A(2)(1) of the Corporations Act to exempt KPMG from
the requirement to hold an AFSL for this purpose.
The relief was provided on the basis that the Fair Value determination was also being provided by KPMG
Corporate Finance, an entity that does hold an AFSL. The grant of relief by ASIC was issued based on the
following circumstances:
• KPMG accepts general advice as to the Fair Value of a Share from the holder of an AFSL that authorises
  it to provide the advice to Coopers’ Shareholders (in this case, KPMG Corporate Finance);
• KPMG and the AFSL licensee each consent to the inclusion of the advice in this Target’s Statement;
• The Target’s Statement contains the advice or the substance of the advice together with statements that:
   • KPMG does not hold an AFSL authorising it to provide the advice;
   • KPMG has been given an exemption by ASIC from the requirement to hold an AFSL in order to give
     the advice; and
   • it is a condition of the exemption that KPMG Corporate Finance consent to the inclusion of the
     advice in this Target’s Statement.




                                                                                                          117
   PART E - 18. Additional information


   18.7.     Other information

This Target’s Statement is required to include all the information that Shareholders and their professional
advisers would reasonably require to make an informed assessment of whether to accept the Offer, but:
• only to the extent to which it is reasonable for investors and their professional advisers to expect to find
  this information in this Target’s Statement; and
• only if the information is known to any of the Directors.
The Directors are of the opinion that the information that Shareholders and their professional advisers would
reasonably require to make an informed assessment of whether to accept the Offer is:
• the information contained in the Bidder’s Statement (to the extent that the information is not
  inconsistent with or superseded by information in this Target’s Statement);
• the information contained in Coopers’ 2005 Annual Report;
• the information contained in the Notice of Requisitioned EGM;
• the information contained in the Notice of Buy-Back EGM and the Buy-Back Documents; and
• the information contained in this Target’s Statement, including the appendices to this Target’s Statement.
The Directors have assumed, for the purposes of preparing this Target’s Statement, that the information
contained in the Bidder’s Statement is accurate (unless they have expressly indicated otherwise in this
Target’s Statement). However, the Directors do not take any responsibility for the contents of the Bidder’s
Statement and are not to be taken as endorsing, in any way, any or all statements contained in it.
In deciding what information should be included in this Target’s Statement, the Directors have had regard to:
• the nature of the Shares;
• the matters Shareholders may reasonably be expected to know;
• the fact that certain matters may be expected to be known to the professional advisers of Shareholders;
  and
• the time available to Coopers to prepare this Target’s Statement.
Coopers’ management would like to reward the diligence of loyal Shareholders who have managed to read
the Target’s Statement all the way through to this point. Please call Haydn Duffield, Company Secretary, on
(08) 8440 1860, Monday to Friday between 9.00am and 5.00pm (Adelaide time) to make arrangements to
receive a complimentary carton of Coopers Ale, Pale Ale, Mild Ale, Dark Ale, Stout, Lager or Premium
Light. An additional carton of Coopers’ quality product may be obtainable if you are able to answer a question
from Haydn about the history or past performance of your Company, contained in this document. To the
extent required by the Corporations Act, calls to Coopers by Shareholders will be recorded, indexed and
stored.




118
PART F


19   Interpretation


20   Authorisation




                      119
      PART F - 19. Interpretation


      19.1.   Defined terms

In this Target’s Statement, the following words have these meanings unless the contrary intention appears or
the context requires otherwise:
AASB means the Australian Accounting Standards Board.
ACCC means the Australian Competition and Consumer Commission.
AGAAP means Australian Generally Accepted Accounting Principles.
American Beverages means American Beverage Distributors Pty Ltd (ABN 11 093 130 753).
AMP Life means AMP Life Limited (ABN 84 079 300 329), the successor to The Australian Mutual
Provident Society.
ANZ means Australia and New Zealand Banking Group Limited (ABN 005 357 522).
ASIC means the Australian Securities and Investments Commission.
ASX means Australian Stock Exchange Limited (ABN 98 008 624 691).
Australian Accounting Standards means:
(a)     accounting standards as that term is defined in the Corporations Act;
(b)     the requirements of the Corporations Act in relation to the preparation and content of financial
        reports; and
(c)     if and to the extent that any matter is not covered by the accounting standards or requirements
        referred to in paragraphs (a) or (b), other relevant accounting standards and generally accepted
        accounting principles applied from time to time in Australia in a business similar to Coopers.
Bidder’s Statement means the Offer Document and Bidder’s Statement dated 1 November 2005 prepared by
Lion Nathan Australia in relation to the Offer, as supplemented or replaced prior to the date of this Target’s
Statement.
Buy-Back means the offer from Coopers to buy-back up to 15% of Shares at $260 per Share as more fully
described in the Notice of Buy-Back EGM and Buy-Back Documents.
Buy-Back Documents means the booklet, acceptance form and withdrawal/amendment form relating to the
Buy-Back that were sent to Shareholders on or about the same time as this Target’s Statement.
Buy-Back EGM means the extraordinary general meeting of Coopers scheduled to be held at 10.30am on
Wednesday, 7 December 2005 at 461 South Road, Regency Park, South Australia to consider, and if thought
fit, approve the Buy-Back resolutions described in section 13.
CAGR means compound annual growth rate.
Carlsberg means Carlsberg Breweries A/S.
Coopers or the Company means Coopers Brewery Limited (ABN 13 007 871 409).
Coopers’ Board or Board means the Board of Directors of Coopers.
Coopers Constitution means the constitution of Coopers comprising a memorandum and articles of
association dated 19 September 1923 (as amended).

120
   PART F - 19. Interpretation

Coopers’ Director or Director means a director of Coopers except in the context of any statement made by
the directors of Coopers in this Target’s Statement in which case it means a director of Coopers except David
Kingston.
Coopers’ Share or Share means a fully paid share in Coopers, irrespective of its class.
Coopers’ Shareholder or Shareholder means a registered holder of Shares.
Corporations Act means Corporations Act 2001 (Cth).
Directors’ Forecasts means the Directors’ forecasts of Coopers’ financial performance for the year ending 30
June 2006, including supporting assumptions on which the forecasts are based, set out in section 7.
EBIT means earnings before net interest, income tax and abnormal items (after normalisation adjustments
as set out in section 7, note 1).
EBITA means earnings before net interest, income tax, goodwill amortisation and abnormal items (after
normalisation adjustments as set out in section 7, note 1).
EBITDA means earnings before net interest, income tax, depreciation, goodwill amortisation and abnormal
items (after normalisation adjustments as set out in section 7, note 1).
EPS means earnings per share.
Ernst & Young or Independent Accountant means Ernst & Young Transaction Advisory Services Limited
(ABN 87 003 599 844).
Fair Value means, in relation to a Share, the fair value of that Share certified by the Coopers auditor pursuant
to the Fair Value Mechanism.
Fair Value Mechanism means the mechanism under which the Coopers auditor may be called upon to certify
the fair value of a Share to be transferred under the Pre-Emptive Rights Regime.
FIRB means the Foreign Investment Review Board.
Grant Samuel or Independent Expert means Grant Samuel & Associates Pty Limited (ABN 28 050 036 372).
Historical Financial Information means the summary consolidated statements of financial performance,
financial position and cashflow for the years ended 30 June 2004 and 30 June 2005 set out in section 7.
IEL means Industrial Equity Limited (ABN 95 004 617 154).
IFRIC means International Financial Reporting Interpretations Committee.
IFRS means International Financial Reporting Standards.
Independent Accountant’s Report means the report prepared by Ernst & Young covering the Directors’
Forecasts, a copy of which is set out in appendix 2.
Independent Expert’s Report means the report prepared by the Independent Expert as to whether Lion
Nathan’s Offer is fair and reasonable, a copy of which is set out in appendix 1.
K Capital means K Capital Pty Ltd (ABN 42 103 454 379).
Kirin means Kirin Brewing Company, Limited.
KPMG means KPMG (ABN 51 194 660 183).
KPMG Corporate Finance means KPMG Corporate Finance (Aust) Pty Ltd (ABN 43 007 363 215).

                                                                                                          121
   PART F - 19. Interpretation

Lion Nathan means Lion Nathan Limited (ABN 34 093 160 448) and its related bodies corporate, including
Lion Nathan Australia.
Lion Nathan Australia means Lion Nathan Australia Pty Ltd (ABN 13 008 596 370), a wholly owned
subsidiary of Lion Nathan Limited.
Lion Nathan’s Offer or Offer means the cash takeover offer by Lion Nathan Australia under chapter 6 of the
Corporations Act to acquire all Shares on the terms and conditions set out in the Bidder’s Statement.
Material Agreement means any agreement, joint venture, partnership, management agreement, distribution
agreement, production agreement, or commitment which would require expenditure, or the foregoing of
revenue, by Coopers and/or its subsidiaries of an amount which is, in aggregate, more than $2 million.
Member’s Relative has the meaning given to that term under articles 2(p) and (q) of the Coopers
Constitution.
Net Profit means net profit after tax attributable to Shareholders as reported in Coopers’ statements of
financial performance for the year ending 30 June 2005.
Notice of Buy-Back EGM means the notice of meeting and accompanying explanatory memorandum dated
15 November 2005, regarding the Buy-Back EGM.
Notice of Requisitioned EGM means the notice of meeting and accompanying modified explanatory
memorandum Coopers proposes to send to Shareholders in relation to the Requisitioned EGM.
NPAT means net profit after tax attributable to Shareholders before abnormal items (after normalisation
adjustments as set out in section 7, note 1).
Offer Period means the period that commenced on 3 November 2005 and ends on the latest applicable date
referred to in clause 3 of annexure 1 to the Bidder’s Statement.
Offer Price means $260 cash per Share.
PBT means profit before tax and abnormal items (after normalisation adjustments as set out in section 7, note 1).
Pre-Emptive Rights Regime means the pre-emptive rights provisions set out in articles 40 to 52 of the
Coopers Constitution.
Premium Beverages means Premium Beverages Pty Ltd (ABN 71 100 818 700).
Recent Fair Value Determination means the determination by KPMG of the fair value (as at 28 September
2005) for each of 6,000 class C Shares pursuant to the Fair Value Mechanism.
Requisitioned EGM means the extraordinary general meeting of Coopers proposed to be held at 10.00am on
Tuesday, 29 November 2005 at 461 South Road, Regency Park, South Australia to consider, and if thought
fit, approve amendments to the Coopers Constitution removing references to Lion Nathan, including its
third tier pre-emptive right and a provision which deems it not to be a competitor of Coopers.
Rothschild means N M Rothschild & Sons (Australia) Limited (ABN 32 008 458 366).
Southcorp means Southcorp Limited (ABN 80 007 722 643).
Target’s Statement means this document (including its appendices).




122
      PART F - 19. Interpretation

Terms of Offer means the terms and conditions of Lion Nathan’s Offer set out in appendices 1 and 2 of the
Bidder’s Statement.
Transfer Notice means the notice that a Shareholder proposing to transfer any Share (except where the
transfer is made to a Member’s Relative of that Shareholder) must give to Coopers under article 40 of the
Coopers Constitution.
year or financial year means the financial year of Coopers ended or ending 30 June.
1995 Coopers Capital Reduction means the selective reduction in the issued capital of Coopers through the
cancellation of 371,353 Shares held by Southcorp confirmed by an order of the Federal Court of Australia
made on 13 September 1995.
2003 Coopers Share Buy-Back means the offer by Coopers in 2003 to buy-back and cancel up to 10% of
Shares for $45.01 per Share on an equal access basis.


      19.2.   Interpretation

The following rules of interpretation apply to this Target’s Statement unless the contrary intention appears or
the context otherwise requires:
(a)     a reference to time is a reference to Adelaide time;
(b)     the singular includes the plural and vice versa;
(c)     a term not defined in this Target’s Statement has the meaning given to it (if any) in the Corporations
        Act;
(d)     a reference to any legislation or to any provision of any legislation includes any modification or re-
        enactment of it, any legislative provision substituted for it and all regulations and statutory instruments
        issued under it;
(e)     a reference to a person includes a firm, a body corporate, a partnership, a joint venture, an
        unincorporated body or association, any government agency or other entity and conversely;
(f)     a reference to a person includes a reference to a person’s executors, administrators, successors,
        substitutes (including, but not limited to, a person taking by novation) and assigns.
(g)     headings used in this Target’s Statement are inserted for convenience and do not affect the
        interpretation of this Target’s Statement;
(h)     a reference to a paragraph, a section or an appendix is a reference to a paragraph or section of or an
        appendix to this Target’s Statement;
(i)     where a word is defined, its other grammatical forms have a corresponding meaning; and
(j)     Australian dollars, dollars, A$ or $ is a reference to the lawful currency of Australia.




                                                                                                             123
  PART F - 20. Authorisation


  20.        Authorisation

This Target’s Statement has been approved by a resolution passed by the Coopers Board. No Director voted
against the resolution authorising this Target’s Statement. David Kingston abstained from voting on this
resolution and was not present at the Board meeting at which it was authorised.


DATED: 15 November 2005


SIGNED for and on behalf of Coopers Brewery Limited




Glenn Cooper AM                            Dr Tim Cooper
Chairman                                   Managing Director




124
APPENDICES


Appendix 1   Independent Expert’s Report


Appendix 2   Independent Accountant’s Report


Appendix 3   Extracts from the Coopers Constitution


Appendix 4   Share acquisition request




                                                      125
This page has been intentionally left blank.
11 November 2005



The Directors
Coopers Brewery Limited
461 South Road
Regency Park SA 5010



Dear Sirs

                                  Takeover Offer by Lion Nathan Limited

1     Introduction

      On 1 September 2005, Lion Nathan Australia Pty Limited, a wholly owned subsidiary of Lion Nathan
      Limited (“Lion Nathan”), announced its intention to make an off-market offer (“Lion Nathan Offer”) for
      the ordinary shares in Coopers Brewery Limited (“Coopers”). The Lion Nathan Offer is $260 cash per
      share. The Lion Nathan Offer implies a value of $352 million for the equity of Coopers. The Lion
      Nathan Offer is subject to a number of conditions, although there is no minimum acceptance requirement.

      Coopers is an unlisted public company based in Regency Park, South Australia, that is primarily involved
      in beer production, marketing and distribution. Coopers has four separate classes of ordinary shares. The
      A, B and D class shares provide the right to appoint directors to the Board of Coopers. The C class shares
      represent approximately 91% of total share capital, but confer only limited rights to appoint a director.
      Notwithstanding the different rights attaching to the different share classes, Lion Nathan is offering the
      same price of $260 per share for all the A, B, C and D class shares.

      Coopers’ constitution includes three tiers of pre-emptive rights that apply if a Coopers shareholder seeks
      to sell shares (other than to a relative). Pursuant to the regime, shareholders must offer their shares first
      to existing shareholders, second to the Coopers superannuation fund and third to Lion Nathan, before they
      may be offered to an external party for acquisition. Shares are transferred at a price determined by
      Coopers’ auditors.

      On 7 November 2005 Coopers announced that it intends to offer to buy-back up to 15% of its shares on
      issue at a cash price of $260 per share, subject to shareholder approval. In the event that shares
      representing more than 15% of the total shares on issue are tendered into the equal access buy-back
      scheme, the number of shares bought back from each shareholder will be reduced on a pro-rata basis.
      Coopers also announced plans to implement an on-going capital management programme, including by
      way of future share buy-backs. The quantum of future share buy-backs (if any) will be determined
      having regard to any free cash flow surplus to Coopers’ capital and growth investment requirements, and
      after allowing for anticipated dividend payments, subject to the requirement to maintain an appropriate
      capital structure. The current buy-back price of $260 has been determined by reference to Coopers’ 2005
      earnings before interest, tax, depreciation and amortisation (“EBITDA”) of $26.2 million. Future buy-
      back prices will increase (or decrease) on a basis proportionate to increases (or reductions) in future
      EBITDA relative to 2005 EBITDA.

      Lion Nathan is an Australasian premium alcoholic beverages company with operations in Australia and
      New Zealand. Lion Nathan is listed on the Australian Stock Exchange (“ASX”) with a market
      capitalisation of $4.0 billion and total assets of approximately $4.1 billion.

      There is no regulatory requirement for Coopers to commission an independent expert’s report in relation
      to the Lion Nathan Offer. However, the directors of Coopers have requested Grant Samuel & Associates
    Pty Limited (“Grant Samuel”) to prepare a report setting out Grant Samuel’s opinion as to whether the
    Lion Nathan Offer is fair and reasonable. The report will accompany the Target’s Statement to be sent by
    Coopers to its shareholders. Grant Samuel is independent of Coopers and has no other involvement with,
    or interest in, the Lion Nathan Offer.

    The sole purpose of this report is an expression of Grant Samuel’s opinion as to whether the Lion Nathan
    Offer is fair and reasonable. This report should not be used for any other purpose or by any other party.

2   Summary of Opinion

    Grant Samuel has valued Coopers in the range $284-320 per share. The valuation represents the
    full underlying value of Coopers and includes a premium for control. The valuation reflects
    Coopers’ track record of rapid growth in earnings in recent years, an expectation of continued
    strong earnings growth, and the significant market position of Coopers in South Australia. It also
    reflects the attractiveness of the Coopers brand and takes into account the substantial synergies
    that should be available to potential acquirers of Coopers with established operations in Australia.

    The Lion Nathan Offer of $260 per share is below Grant Samuel’s valuation range. Accordingly,
    the Lion Nathan Offer is not fair.

    A takeover offer that is not fair can nonetheless be reasonable, if there are compelling reasons to
    accept the offer. In Grant Samuel’s view, an opportunity to realise $260 per share could be
    attractive to Coopers shareholders. Under the Coopers’ constitution, Coopers shareholders who
    wish to sell shares are required to accept a price nominated by Coopers’ auditors. The Lion
    Nathan Offer represents a considerable premium to the nominated prices of $16.27-45.01 at which
    share transfers have occurred since December 2002. Whilst the nominated price would almost
    certainly now be significantly higher than prices in the range $16.27-45.01, it is possible that in the
    absence of the Lion Nathan Offer the nominated price could be well below $260 per share. In
    Grant Samuel’s view, the prospects of a higher offer from an alternative bidder are remote, given
    the restrictions on share ownership and share transfers set out in Coopers’ constitution. Moreover,
    Grant Samuel’s valuation range depends on the availability of substantial synergies, which can only
    be realised by Coopers shareholders through a takeover offer or other change of control
    transaction.

    However, shareholders accepting the Lion Nathan Offer in its current form cannot be certain of
    realising $260 per share. The Lion Nathan Offer remains subject to a number of conditions and
    could lapse because one or more of the conditions was not fulfilled or waived. In these
    circumstances, shareholders who had already accepted the Lion Nathan Offer could be “locked in”
    and obliged to accept a lower price to be nominated by Coopers’ auditors, as a result of the
    operation of Coopers’ share transfer and pre-emptive rights regime.

    Further, there are alternatives for shareholders to consider. Coopers has announced its intention
    to undertake an immediate 15% buy-back at $260 per share and to implement further buy-backs in
    the future. However, in considering such alternatives shareholders should be aware that:

        there is no certainty of receiving $260 for all shares in the buy-back. If the aggregate number
        of shares tendered into the buy-back substantially exceeds 15% of total Coopers shares on
        issue, there could be a material scale back and shareholders could be left with a significant
        residual shareholding; and

        future buy-backs will be at prices substantially higher than $260 per share, if Coopers achieves
        its 2006 earnings forecasts and delivers further earnings growth in subsequent years. For
        example, the 2006 buy-back price will be around $314 per share if Coopers achieves its 2006
        earnings forecast. However, future buy-backs, and the extent to which shareholders will be
        able to realise their shareholdings through future buy-backs, are uncertain. In essence future
        buy-backs will only take place at the discretion of the Coopers directors, and the quantum may
        be relatively limited.



                                                                                                       Page 2
    In view of the above, Grant Samuel believes that:

        the Lion Nathan Offer could be attractive to shareholders with a requirement for short term
        liquidity in respect of most or all of their shareholdings. However, it would not be sensible to
        accept the Lion Nathan Offer until it became unconditional; and

        for Coopers shareholders with limited or no short term liquidity requirements, or a greater
        appetite for investment risk in relation to their Coopers shareholdings, rejection of the Lion
        Nathan Offer (even if unconditional) may be more attractive.

    Shareholders should also understand that acceptance of the current Lion Nathan Offer would
    significantly reduce the prospects of negotiating a higher offer price, either in the short term or at
    some stage in the future. Given the considerable strategic benefits to Lion Nathan of owning
    Coopers, an increase in the Lion Nathan Offer is a credible possibility.

    Accordingly, Grant Samuel has concluded that the Lion Nathan Offer is not reasonable. However,
    the Lion Nathan Offer would be reasonable for shareholders with a requirement for short term
    liquidity for all or most of their shareholdings, should the Lion Nathan Offer become free of all
    conditions.

3   Key Conclusions

         Grant Samuel has valued Coopers in the range $284-320 per share.

         Grant Samuel has valued Coopers in the range $384-433 million, which is equivalent to $284-320
         per share. The valuation represents the full underlying value of Coopers and includes a premium for
         control.

         The valuation assumes that Coopers is available to be acquired through an open, transparent and
         unrestricted process by any potential purchaser. It takes no account of the current restrictions in
         Coopers’ constitution on share ownership and transfers.

         The value has been assessed by estimating the market value of Coopers’ business operations and
         other assets and deducting external net borrowings and non-trading liabilities. The operating
         business has been valued principally by reference to capitalised earnings. Grant Samuel has cross-
         checked the valuation of the operating business by way of an indicative discounted cash flow
         analysis. The valuation of Coopers is summarised below:

                                         Coopers - Valuation Summary ($ millions)
                                                                                      Valuation Range
                                                                                     Low           High
          Coopers’ business operations                                               400.0         450.0
          Property                                                                     2.4           2.4
          Outside equity interest                                                     (6.8)         (7.7)
          Net borrowings at 30 June 2005                                              (7.4)         (7.4)
          Payment of final dividend                                                   (4.1)         (4.1)
          Value of equity                                                            384.2         433.3
          Fully diluted shares on issue (000s)                                       1,353         1,353
          Value per share ($)                                                       283.89        320.17


         The estimated full underlying value of Coopers of $384-433 million has been allocated across all
         1.353 million Coopers shares on issue, without differentiating between the different classes of
         shares. On this basis, the estimated full underlying value of Coopers is $284-320 per Coopers share.




                                                                                                        Page 3
                  The multiples of earnings implied by the valuation are high. However, in Grant Samuel’s view
                  they are reasonable, having regard to Coopers’ track record of strong earnings growth, its
                  positive outlook, the strength of the Coopers brands and the substantial synergies available to
                  potential purchasers of the company.

                  The Coopers operating business has been valued in the range $400-450 million. The earnings and
                  net tangible assets multiples implied by the valuation are summarised below:

                                                      Coopers – Implied Valuation Parameters
                                                                                                   Variable
                                                                                                                Low     High
                                                                                                  ($ million)
                   Multiple of EBITDA (before synergies)
                   Historical (year ended 30 June 2005)                                               26.2      15.3x   17.2x
                   Forecast (year ending 30 June 2006)                                                31.6      12.7x   14.2x
                   Multiple of EBITA1 (before synergies)
                   Historical (year ended 30 June 2005)                                               21.8      18.4x   20.7x
                   Forecast (year ending 30 June 2006)                                                27.0      14.8x   16.7x
                   Multiple of net profit after tax (before goodwill amortisation and synergies
                   and after outside equity interest)
                   Historical (year ended 30 June 2005)                                               14.4      26.6x   30.0x
                   Forecast (year ending 30 June 2006)                                                18.1      21.3x   24.0x
                   Multiple of net tangible assets (at 30 June 2005)
                   Geared                                                                             48.2       5.9x    6.6x
                   Ungeared                                                                           55.1       5.2x    5.8x


                  The multiples implied by the valuation range are high. However, in Grant Samuel’s opinion they
                  are reasonable having regard to the following:
                        the recent and current performance of Coopers’ business. Since the 2001 financial year,
                        Coopers has almost doubled its beer volumes, and has doubled its beer revenues and earnings
                        in what is essentially a static market. Further growth is expected in the short to medium term,
                        based on Coopers maintaining its existing market position in South Australia and increasing
                        its share of the growing premium beer category in other States;
                        the attractiveness of Coopers’ business to a number of potential buyers. Coopers represents the
                        last major independent brewer in Australia, offering potential acquirers a strong market
                        position in South Australia, and the potential to leverage Coopers’ beers through a national
                        distribution network;
                        the substantial synergies available to potential acquirers of Coopers (see below). If potential
                        annual synergies of (say) $10 million were taken into account, the prospective EBITDA and
                        EBITA multiples would be reduced to 9.6-10.8 and 10.8-12.2 respectively;
                        the quality of Coopers’ existing beer brand portfolio (particularly its Pale Ale and Sparkling
                        Ale products), Coopers’ significant share of the South Australia beer market and its growing
                        market share in the eastern States; and
                        the strength of Coopers’ home brew business and its dominant market share nationally.

                  At the same time, it should be recognised that:
                        while Coopers has a strong market position in the South Australian beer market, it is a
                        relatively small participant in the total Australian beer market, with a national market share of
                        only 2.6%. Therefore, although it is an attractive business, its acquisition by any of the major
                        players is unlikely to represent a company transforming transaction; and

1
    EBITA is earnings before net interest, tax, goodwill amortisation and significant items.


                                                                                                                         Page 4
     the number of potential buyers is not extensive (even if Coopers’ restrictive constitution is
     assumed not to limit potential buyers). The only significant participants in the Australian beer
     market (other than Lion Nathan) are Foster’s Group Limited and San Miguel Corporation.
     Interest from offshore buyers would be a possibility and private equity investors may also be
     attracted to the business, given its established operations and solid cash flows. However, such
     buyers would have limited ability to pay full underlying value, as they would be able to extract,
     at most, only modest synergies through acquiring the business.

The valuation reflects substantial synergies available to potential purchasers of Coopers.

Coopers’ management estimates that the synergies available to Lion Nathan from an acquisition of
Coopers are approximately $20 million per annum. Cost synergies can be obtained primarily in the
areas of processing and manufacturing costs (through consolidation of production at Coopers’
brewery at Regency Park and closure of Lion Nathan’s West End brewery which is currently
underutilised), lower procurement costs available through better buying terms, and the removal of
the majority of administration expenses. Coopers’ management estimates that these cost savings
could be of the order of $17 million (pre-tax). Additionally, Coopers’ management estimates that
Lion Nathan could generate $3 million (pre-tax) revenue synergies through the distribution of
Coopers’ products through the Lion Nathan national distribution network.

Some of these synergies are “special benefits”, available only to Lion Nathan. Grant Samuel
estimates that approximately $5 million of the $20 million synergies are specific to Lion Nathan,
and should therefore not be considered in the valuation. Moreover, it is unrealistic to expect that an
acquirer of Coopers would pay for 100% of potential synergies, given the risks and costs inevitably
associated with their realisation. Grant Samuel believes that it is reasonable to reflect synergies of
around $10 million in the valuation of Coopers.

The Lion Nathan Offer is not fair.

The Lion Nathan Offer of $260 per Coopers share is below Grant Samuel’s valuation range of $284-
320 per share. Therefore, the Lion Nathan Offer is not fair.

Assessing the reasonableness of the Lion Nathan Offer is complex. Overall, Grant Samuel has
concluded that the Lion Nathan Offer is not reasonable. However, the Lion Nathan Offer
would be reasonable for shareholders with a requirement for short term liquidity for all or
most of their shareholdings, should the Lion Nathan Offer become free of conditions.

The Lion Nathan Offer of $260 per Coopers share is below Grant Samuel’s assessment of the value
of Coopers in the range $284-320 per share. Accordingly, it is not fair. However, some takeovers
may be judged reasonable, despite the offer price not being fair, if there are factors other than price
that suggest that target company shareholders should consider accepting the offer.

Factors to be considered in assessing whether an offer might be reasonable, notwithstanding that it is
not fair, include:

      the existing shareholding of the bidder;

      the prospects of an alternative offer; and

      the likely market price and liquidity of shares in the target company in the absence of the
      takeover offer.

In the case of the Lion Nathan Offer, the following factors suggest that realising $260 per share
could be attractive to Coopers shareholders:

      Coopers shareholders who wish to sell shares are required to accept a price nominated by
      Coopers’ auditors. The Lion Nathan Offer represents a considerable premium to the
      nominated prices of $16.27-45.01 at which share transfers have occurred since December
      2002. While the nominated price would almost certainly now be significantly higher, it is

                                                                                                 Page 5
      possible that in the absence of the Lion Nathan Offer the nominated price could be well below
      $260 per share;

      although a superior offer from Lion Nathan is possible, the prospects of an alternative bidder
      making a more attractive bid for Coopers appear remote:

       •    Coopers’ constitution deters bidders from making a takeover offer for Coopers:

            -    under the pre-emptive rights regime set out in Coopers’ constitution, any shares
                 must first be offered to existing shareholders, second to Coopers’ superannuation
                 fund, and third to Lion Nathan, before they can be acquired by an external party;

            -    the constitution effectively precludes brewing companies operating in competition
                 with Coopers (other than Lion Nathan) from owning shares in Coopers;

       •    since the announcement of the Lion Nathan Offer on 1 September 2005, potential
            counter bidders have had two months to make a higher offer for Coopers. To date, no
            such offers have been made;

      Coopers is an unlisted public company, and accordingly, there is no formal market for share
      exchanges to take place. Therefore, Coopers shares are extremely illiquid. In this context,
      realising value at levels close to Coopers’ estimated underlying value may be attractive; and

      Grant Samuel’s valuation of Coopers reflects the substantial synergies available to potential
      purchasers of Coopers (on the assumption that there are no limitations on the acquisition of
      Coopers by industry participants). These synergies cannot be realised by Coopers
      shareholders except through a takeover offer or other change of control transaction. However,
      such a transaction (other than the Lion Nathan Offer) appears highly unlikely, given the share
      transfer and ownership restrictions contained in Coopers’ constitution.

However, there is uncertainty as to whether Coopers shareholders who accept the Lion Nathan Offer
in its current form (ie. subject to various conditions) will realise $260 per share. Grant Samuel
understands that Coopers shareholders who accept the Lion Nathan Offer will be subject to the pre-
emption regime, including the process by which Coopers’ auditors nominate a transfer price.
Coopers’ constitution provides that shareholders who elect to sell make an irrevocable election to be
bound by the pre-emptive process. The Lion Nathan Offer remains subject to a number of
conditions and will lapse if one or more of the conditions is not fulfilled or waived. In these
circumstances, shareholders who had already accepted the Lion Nathan Offer would still be bound
to sell their shares through the pre-emptive process, at a price nominated by Coopers’ auditors. It is
reasonable to expect, while the Lion Nathan Offer is on foot, that the nominated transfer price would
be equal to the offer price of $260 per share, but in the absence of the Lion Nathan Offer the
nominated price could be well below $260 per share. Accordingly, shareholders who accept the
Lion Nathan Offer while it remains subject to conditions can not be certain of realising $260 per
share.

Shareholders should also be aware that there is continuing litigation regarding the status of Lion
Nathan’s pre-emptive rights and its right to be a shareholder in Coopers. Subject to a decision of the
Federal Court of Australia, Coopers’ intends to hold an Extraordinary General Meeting on
29 November 2005 at which shareholders will vote on a special resolution to amend the Coopers
constitution to remove Lion Nathan’s pre-emptive rights and its right to be a shareholder in Coopers.
Until these matters are resolved, the Lion Nathan Offer remains subject to uncertainty, and
consequently shareholders who accepted the Lion Nathan Offer could not be certain of realising
$260 per share.

Further, there are alternatives for shareholders to consider. Coopers has announced its intention to
undertake an immediate 15% buy-back at $260 per share and to implement further buy-backs in the
future. However, in considering such alternatives shareholders should be aware that:

    there is no certainty of receiving $260 for all shares in the buy-back. If the aggregate number of
    shares tendered into the buy-back substantially exceeds 15% of total Coopers shares on issue,

                                                                                                Page 6
             there could be a material scale back and shareholders could be left with a significant residual
             shareholding;

             the nominated price that would apply should shareholders seek to realise any residual
             shareholding through the pre-emptive rights process could be significantly less than $260 per
             share; and

             based on the proposed formula to determine future buy-back prices, future buy-backs will be at
             prices substantially higher than $260 per share, if Coopers achieves its 2006 earnings forecasts
             and delivers further earnings growth in subsequent years. For example, the 2006 buy-back
             price will be around $314 per share if Coopers achieves its 2006 earnings forecast. However,
             shareholders should understand that future buy-backs, and the extent to which shareholders will
             be able to realise their shareholdings through future buy-backs, are uncertain. Future buy-backs
             will be subject to a range of constraints (including the availability of surplus free cash, the
             extent of other capital requirements, any financing constraints and the need to maintain an
             appropriate capital structure). In essence future buy-backs will only take place at the discretion
             of the Coopers directors, and the quantum may be relatively limited.

         In such complex and uncertain circumstances, it is not appropriate to be prescriptive. However,
         taking into account all of the factors outlined above it is Grant Samuel’s opinion that:

             the Lion Nathan Offer could be attractive to shareholders with a requirement for short term
             liquidity in respect of most or all of their shareholdings. However, it would not be sensible to
             accept the Lion Nathan Offer until it became unconditional; and

             for Coopers shareholders with limited or no short term liquidity requirements, or a greater
             appetite for investment risk in relation to their Coopers shareholdings, rejection of the Lion
             Nathan Offer (even if unconditional) may be more attractive. Such shareholders would have an
             opportunity to realise greater value through future buy-backs at significantly higher prices
             (although this is far from certain). Moreover, the current buy-back would provide an
             opportunity to realise at least part of their investment in Coopers, should that be their
             preference.

         In any event, shareholders should recognize that acceptance of the current Lion Nathan Offer would
         significantly reduce the prospects of negotiating a higher offer price, either in the short term or at
         some stage in the future. Lion Nathan is clearly keen to acquire Coopers. Given the unique
         strategic benefits that Lion Nathan could derive from ownership of Coopers, the value of Coopers to
         Lion Nathan may well exceed Grant Samuel’s valuation of Coopers in the range $284-320 per share.
         An increase in the Lion Nathan Offer is a credible possibility, particularly if Lion Nathan receives
         limited or no acceptances of its offer. However, shareholders should understand that such a strategy
         involves risks and there can be no certainty that a higher offer would be forthcoming.

         Accordingly, Grant Samuel has concluded that the Lion Nathan Offer is not reasonable. However,
         the Lion Nathan Offer would be reasonable for shareholders with a requirement for short term
         liquidity for all or most of their shareholdings, should the Lion Nathan Offer become free of
         conditions.

4   Other Matters

    The decision of each shareholder as to whether to accept the Lion Nathan Offer is a matter for individual
    shareholders based on each shareholder’s views as to value and future market conditions, risk profile,
    liquidity preference, investment strategy, portfolio structure and tax position. In particular, taxation
    consequences may vary from shareholder to shareholder. If in any doubt, shareholders should consult an
    independent professional adviser.

    Grant Samuel has prepared a Financial Services Guide as required by the Corporations Act, 2001. The
    Financial Services Guide is included at the beginning of the full report.




                                                                                                         Page 7
This letter is a summary of Grant Samuel’s opinion. The full report from which this summary has been
extracted is attached and should be read in conjunction with this summary.

The opinion is made as at the date of this letter and reflects circumstances and conditions as at that date.

Yours faithfully

GRANT SAMUEL & ASSOCIATES PTY LIMITED




                                                                                                        Page 8
  Coopers Brewery Limited




Financial Services Guide and
Independent Expert’s Report
  in relation to the offer by
     Lion Nathan Limited



Grant Samuel & Associates Pty Limited
            (ACN 050 036 372)

           November 2005
                                       Financial Services Guide
Grant Samuel & Associates Pty Limited (“Grant Samuel”) holds Australian Financial Services Licence No. 240985
authorising it to provide financial product advice on securities and interests in managed investments schemes to
wholesale and retail clients.

The Corporations Act, 2001 requires Grant Samuel to provide this Financial Services Guide (“FSG”) in connection
with its provision of an independent expert’s report (“Report”) which is included in a document (“Disclosure
Document”) provided to members by the company or other entity (“Entity”) for which Grant Samuel prepares the
Report.

Grant Samuel does not accept instructions from retail clients. Grant Samuel provides no financial services directly
to retail clients and receives no remuneration from retail clients for financial services. Grant Samuel does not
provide any personal retail financial product advice to retail investors nor does it provide market-related advice to
retail investors.

When providing Reports, Grant Samuel’s client is the Entity to which it provides the Report. Grant Samuel receives
its remuneration from the Entity. In respect of the Report for Coopers Brewery Limited (“Coopers Report”), Grant
Samuel will receive a fixed fee of $350,000 plus reimbursement of out-of-pocket expenses for the preparation of the
Report (as stated in Section 7.3 of the Coopers Report).

No related body corporate of Grant Samuel, or any of the directors or employees of Grant Samuel or of any of those
related bodies or any associate receives any remuneration or other benefit attributable to the preparation and
provision of the Report.

Grant Samuel is required to be independent of the Entity in order to provide a Report. The guidelines for
independence in the preparation of Reports are set out in Practice Note 42 issued by the Australian Securities
Commission (the predecessor to the Australian Securities & Investments Commission) on 8 December 1993. The
following information in relation to the independence of Grant Samuel is stated in Section 7.3 of the Coopers Report:

       “Grant Samuel and its related entities do not have at the date of this report, and have not had within
       the previous two years, any shareholding in or other relationship with Coopers or Lion Nathan that
       could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in
       relation to the Lion Nathan Offer.

       Grant Samuel had no part in the formulation of the Lion Nathan Offer. Its only role has been the
       preparation of this report.

       Grant Samuel will receive a fee of $350,000 for the preparation of this report. This fee is not
       contingent on the outcome of the Lion Nathan Offer. Grant Samuel’s out-of-pocket expenses in
       relation to the preparation of the report will be reimbursed. Grant Samuel will receive no other benefit
       for the preparation of this report.

       Grant Samuel considers itself to be independent in terms of Practice Note 42 issued by the ASIC
       (previously known as Australian Securities Commission) on 8 December 1993.”

Grant Samuel has internal complaints-handling mechanisms and is a member of the Financial Industry Complaints
Services’ Complaints Handling Tribunal, No. F4197.

Grant Samuel is only responsible for the Report and this FSG. Complaints or questions about the Disclosure
Document should not be directed to Grant Samuel which is not responsible for that document. Grant Samuel will
not respond in any way that might involve any provision of financial product advice to any retail investor.
                                                                   Table of Contents


1   Details of Lion Nathan Offer ...........................................................................................................................1

2   Scope of the Report...........................................................................................................................................3
    2.1   Basis of the Report ................................................................................................................................3
    2.2   Basis of Evaluation ................................................................................................................................3
    2.3   Sources of the Information...................................................................................................................4
    2.4   Limitations and Reliance on Information ..........................................................................................5

3   Overview of the Beer Industry ........................................................................................................................7
    3.1   Overview.................................................................................................................................................7
    3.2   Australian Beer Market........................................................................................................................7

4   Profile of Coopers ...........................................................................................................................................11
    4.1    Background ..........................................................................................................................................11
    4.2    Profile of Operations ...........................................................................................................................12
    4.3    Historical and Forecast Financial Performance ..............................................................................14
    4.4    Financial Position ................................................................................................................................15
    4.5    Cash Flow .............................................................................................................................................16
    4.6    Taxation Position.................................................................................................................................17
    4.7    Capital Structure and Ownership .....................................................................................................17

5   Valuation of Coopers ......................................................................................................................................19
    5.1   Valuation Methodology.......................................................................................................................19
    5.2   Valuation Summary ............................................................................................................................21
    5.3   Value of Coopers Business..................................................................................................................22
    5.4   Synergies...............................................................................................................................................28
    5.5   Indicative Discounted Cash Flow Analysis.......................................................................................29
    5.6   Property ................................................................................................................................................32
    5.7   Outside Equity Interests .....................................................................................................................32
    5.8   Net Borrowings ....................................................................................................................................32
    5.9   Final Dividend......................................................................................................................................32

6   Evaluation of the Lion Nathan Offer............................................................................................................33
    6.1   The Lion Nathan Offer is not Fair ....................................................................................................33
    6.2   The Offer is Not Reasonable ..............................................................................................................33
    6.3   Shareholder Issues...............................................................................................................................35

7   Qualifications, Declarations and Consents ..................................................................................................36
    7.1   Qualifications .......................................................................................................................................36
    7.2   Disclaimers ...........................................................................................................................................36
    7.3   Independence .......................................................................................................................................36
    7.4   Declarations..........................................................................................................................................37
    7.5   Consents................................................................................................................................................37
    7.6   Other .....................................................................................................................................................37


Appendices

1   Market Evidence from Sharemarket Trading Prices
2   Market Evidence from Transactions
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY
1   Details of Lion Nathan Offer

    On 1 September 2005, Lion Nathan Australia Pty Limited, a wholly owned subsidiary of Lion Nathan
    Limited (“Lion Nathan”), announced its intention to make an off-market offer (“Lion Nathan Offer”) for
    the ordinary shares in Coopers Brewery Limited (“Coopers”). The Lion Nathan Offer is $260 cash per
    share. The Lion Nathan Offer implies a value of $352 million for the equity of Coopers. The Lion
    Nathan Offer is not subject to a minimum acceptance condition.

    Coopers is an unlisted public company based in Regency Park, South Australia. Coopers is primarily
    involved in beer production, marketing and distribution. Its principal beer brands are Coopers Original
    Pale Ale, Coopers Sparkling Ale, Coopers Mild Ale, Coopers Dark Ale and Coopers Stout.

    Coopers has four separate classes of ordinary shares (A, B, C and D classes of ordinary shares). The A, B
    and D class shares provide the right to appoint directors to the Board of Coopers. The C class shares
    represent approximately 91% of total share capital, but confer only limited rights to appoint a director.
    Notwithstanding the different rights attaching to the different share classes, Lion Nathan is offering the
    same price of $260 per share for all the A, B, C and D class shares.

    Coopers’ constitution provides for three tiers of pre-emptive rights that apply if a Coopers shareholder
    seeks to sell shares (other than to a relative). Lion Nathan has a third tier pre-emptive right in Coopers.
    The pre-emptive right was granted to Lion Nathan in 1995 in exchange for a 19.9% shareholding in
    Coopers that Lion Nathan obtained following its acquisition of the SA Brewing Company Limited (“SA
    Brewing”). The third tier pre-emptive right entitles Lion Nathan to purchase Coopers shares when they
    are offered for sale but are not acquired by existing shareholders or the Coopers superannuation fund.

    The Lion Nathan Offer is subject to the following conditions:

         approval under the Foreign Acquisition and Takeovers Act;

         no objection being made by any regulatory authority (for example, the Australian Competition and
         Consumer Commission (“ACCC”));

         no material adverse change in Coopers;

         no material acquisitions, disposals or new commitments by Coopers;

         no material agreement with competitors or change of control provisions by Coopers;

         confirmation of Coopers’ capital structure;

         provision of a Board seat for every 15% of Coopers acquired by Lion Nathan;

         appropriate consent from Coopers’ directors under the company’s constitution; and

         various prescribed occurrences.

    On 5 September 2005, Coopers lodged an application in relation to the Lion Nathan Offer with the
    Takeovers Panel submitting that a letter sent from Lion Nathan to Coopers’ shareholders did not
    adequately explain the pre-emptive rights which apply to shareholders wishing to sell their shares. On
    21 September 2005, the Takeovers Panel announced that it had declined the application, but considered
    that a letter should be sent to Coopers shareholders explaining the manner in which the pre-emptive rights
    operate.

    On 9 September 2005, Lion Nathan lodged an application with the Takeovers Panel alleging that the
    Coopers’ Board of directors had made a number of conflicting statements regarding the value of Coopers’
    shares which were likely to mislead and confuse Coopers’ shareholders. On 23 September 2005, the
    Takeovers Panel announced that it had declined to commence proceedings in response to the application,
    as there was no real likelihood that the public statements by the Coopers Board of which Lion Nathan
    complained had caused unacceptable circumstances.


                                                                                                         Page 1
In addition, there are a number of court proceedings in progress involving Coopers and Lion Nathan in
relation to a variety of matters, including the pre-emptive rights regime.

On 7 November 2005 Coopers announced a proposed equal access buy-back scheme for up to 15% of the
Coopers shares on issue, at a buy-back price of $260 per share. The buy-back scheme will require
shareholder approval. Under the buy-back scheme, Coopers shareholders will be able to tender their
shares to the company. If shares representing more than 15% of Coopers’ total shares on issue are
tendered into the buy-back, the number of shares bought back from each tendering shareholder will be
scaled back such that the total number of shares bought back does not exceed 15%.

Coopers also announced plans to implement an on-going capital management programme, including by
way of future share buy-backs. The quantum of future share buy-backs (if any) will be determined
having regard to any free cash flow surplus to Coopers’ capital and growth investment requirements, and
after allowing for anticipated dividend payments, subject to the requirement to maintain an appropriate
capital structure. The current buy-back price of $260 has been determined by reference to Coopers’ 2005
earnings before interest, tax, depreciation and amortisation (“EBITDA”) of $26.2 million. Future buy-
back prices will increase (or decrease) on a basis proportionate to increases (or reductions) in future
EBITDA relative to 2005 EBITDA.

Lion Nathan is an Australasian premium alcoholic beverages company with operations in Australia and
New Zealand. Lion Nathan is listed on the Australian Stock Exchange (“ASX”) and has a market
capitalisation of $4.0 billion and total assets of approximately $4.1 billion.




                                                                                                 Page 2
2   Scope of the Report

    2.1   Basis of the Report

          Section 640 of the Corporations Act 2001 (“Corporations Act”) states that a Target’s Statement
          made in response to a takeover offer for shares in an Australian public listed company must be
          accompanied by an independent expert’s report if:

               the bidder’s voting power in the target is 20% or more; or

               a director of the bidder is also a director of the target company.

          In this case, Lion Nathan does not have an interest in Coopers nor are there any common directors.
          However, the directors of Coopers have engaged Grant Samuel & Associates Pty Limited (“Grant
          Samuel”) to prepare an independent expert’s report as if it were required for the purposes of
          Section 640 of the Corporations Act. The report is to set out Grant Samuel’s opinion as to whether
          the Lion Nathan Offer is fair and reasonable and to state reasons for that opinion.

          The sole purpose of this report is an expression of Grant Samuel’s opinion as to whether the Lion
          Nathan Offer is fair and reasonable to Coopers shareholders. A copy of this report is to be
          despatched to shareholders with the Target’s Statement issued by Coopers.

          This report is general financial product advice only and has been prepared without taking into
          account the objectives, financial situation or needs of individual Coopers shareholders. Because of
          that, before acting in relation to their investment, shareholders should consider the appropriateness
          of the advice having regard to their own objectives, financial situation or needs. Shareholders
          should read the Bidder’s Statement issued by Lion Nathan and the Target’s Statement issued by
          Coopers in relation to the Lion Nathan Offer.

          Acceptance or rejection of the Lion Nathan Offer is a matter for individual shareholders based on
          their expectations as to value and future market conditions and their particular circumstances
          including risk profile, liquidity preference, portfolio strategy and tax position. Shareholders who
          are in doubt as to the action they should take in relation to the Lion Nathan Offer should consult
          their own professional adviser.

    2.2   Basis of Evaluation

          The term fair and reasonable has no legal definition although over time a commonly accepted
          meaning has evolved. In the context of a takeover, an offer is considered fair and reasonable if the
          price fully reflects the value of a company’s underlying businesses and assets.

          Policy Statement 75 issued by the Australian Securities Commission, the predecessor to the
          Australian Securities & Investment Commission (“ASIC”), attempts to provide a precise definition
          of fair and reasonable. The Policy Statement continues earlier regulatory guidelines that create a
          distinction between “fair” and “reasonable”. Fairness is said to involve a comparison of the offer
          price with the value that may be attributed to the securities that are the subject of the offer based
          on the value of the underlying businesses and assets. In determining fairness any existing
          entitlement to shares by the offerer is to be ignored. Reasonableness is said to involve an analysis
          of other factors that shareholders might consider prior to accepting a takeover offer such as:

               the offeror’s existing shareholding;

               other significant shareholdings;

               the probability of an alternative offer; and

               the liquidity of the market for the target company’s shares.

          A takeover offer could be considered “reasonable” if there were valid reasons to accept the offer
          notwithstanding that it was not “fair”.

                                                                                                         Page 3
      For the purpose of this report, Grant Samuel has treated “fair” and “reasonable” as separate
      concepts in accordance with Policy Statement 75. Fairness is a more demanding criteria. A “fair”
      offer will always be “reasonable” but a “reasonable” offer will not necessarily be “fair”.

      A fair offer is one that reflects the full market value of a company’s businesses and assets. A
      takeover offer that is in excess of the pre-bid market prices but less than full value will not be fair
      but may be reasonable if shareholders are otherwise unlikely in the foreseeable future to realise an
      amount for their shares in excess of the bid price. This is commonly the case in takeover offers
      where the bidder already controls the target company. In that situation the minority shareholders
      have little prospect of receiving full value from a third party offeror unless the controlling
      shareholder is prepared to sell its controlling shareholding.

      Grant Samuel has determined whether the Lion Nathan Offer is fair by comparing the offer price
      with the estimated underlying value range of Coopers. The Lion Nathan Offer will be fair if it
      falls within the estimated underlying value range. In considering whether the Lion Nathan Offer is
      reasonable, the factors that have been considered include:

           the estimated value of Coopers compared to the offer price;

           the existing shareholding structure of Coopers and the terms of Coopers’ constitution in
           relation to transferability;

           the likelihood of an alternative offer and alternative transactions that could realise fair value;

           the likely market price and liquidity of Coopers shares in the absence of the Lion Nathan
           Offer; and

           other advantages and disadvantages for Coopers shareholders of accepting the Lion Nathan
           Offer.

2.3   Sources of the Information

      The following information was utilised and relied upon, without independent verification, in
      preparing this report:

      Publicly Available Information

           the Bidder’s Statement;

           the Target’s Statement (including earlier drafts);

           annual reports of Coopers for the five years ended 30 June 2005;

           brokers’ reports and recent press articles on Coopers and the beer industry; and

           sharemarket data and related information on Australian and international listed companies
           engaged in the brewing industry and on transactions involving companies in this industry.

      Non Public Information provided by Coopers

           forecast for the year ending 30 June 2006 prepared by Coopers management; and

           other confidential documents, Board papers, presentations and working papers.

      In preparing this report, representatives of Grant Samuel visited Coopers’ manufacturing
      operations at Regency Park, South Australia. Grant Samuel has also held discussions with, and
      obtained information from, senior management of Coopers and its advisers.



                                                                                                        Page 4
2.4   Limitations and Reliance on Information

      Grant Samuel believes that its opinion must be considered as a whole and that selecting portions of
      the analysis or factors considered by it, without considering all factors and analyses together, could
      create a misleading view of the process underlying the opinion. The preparation of an opinion is a
      complex process and is not necessarily susceptible to partial analysis or summary.

      Grant Samuel’s opinion is based on economic, sharemarket, business trading, financial and other
      conditions and expectations prevailing at the date of this report. These conditions can change
      significantly over relatively short periods of time. If they did change materially, subsequent to the
      date of this report, the opinion could be different in these changed circumstances. However,
      subject to Section 670C of the Corporations Act, Grant Samuel has no obligation or undertaking to
      advise any person of any change in circumstances which has come to its attention after the date of
      this report or to review, revise or update its report or opinion.

      This report is also based upon financial and other information provided by Coopers and its
      advisers. Grant Samuel has considered and relied upon this information. Coopers has represented
      in writing to Grant Samuel that to its knowledge the information provided by it was complete and
      not incorrect or misleading in any material aspect. Grant Samuel has no reason to believe that any
      material facts have been withheld.

      The information provided to Grant Samuel has been evaluated through analysis, inquiry and
      review to the extent that it considers necessary or appropriate for the purposes of forming an
      opinion as to whether the Lion Nathan Offer is fair and reasonable to Coopers shareholders.
      However, Grant Samuel does not warrant that its inquiries have identified or verified all of the
      matters that an audit, extensive examination or “due diligence” investigation might disclose. “Due
      diligence” on Coopers is the responsibility of Coopers and its management and is beyond the
      scope of an independent expert’s report. In any event, an opinion of the kind expressed in this
      report is more in the nature of an overall review rather than a detailed audit or investigation.

      An important part of the information used in forming an opinion of the kind expressed in this
      report is comprised of the opinions and judgement of management. This type of information was
      also evaluated through analysis, inquiry and review to the extent practical. However, such
      information is often not capable of external verification or validation.

      Preparation of this report does not imply that Grant Samuel has audited in any way the
      management accounts or other records of Coopers. It is understood that the accounting
      information that was provided was prepared in accordance with generally accepted accounting
      principles and in a manner consistent with the method of accounting in previous years (except
      where noted).

      The information provided to Grant Samuel included a consolidated forecast for Coopers for the
      year ending 30 June 2006 (“the 2006 Forecast”) prepared by management and approved by the
      Board of Coopers. Coopers is responsible for the forecast. The forecast was reviewed by Ernst &
      Young Transaction Advisory Services Limited (“Ernst & Young”) and its Independent
      Accountant’s Report is set out in Appendix 2 of the Target’s Statement.

      Grant Samuel has used and relied on this financial information for the purposes of its analysis.
      The major assumptions underlying the forecast were also reviewed by Grant Samuel in the context
      of current economic, financial and other conditions.

      Grant Samuel considers that, based on the inquiries it has undertaken and only for the purposes of
      its analysis for this report (which do not constitute, and are not as extensive as, an audit or
      accountant’s examination), there are reasonable grounds to believe that the 2006 Forecast has been
      prepared on a reasonable basis. In forming this view, Grant Samuel has taken the following
      factors, inter alia, into account that:

           the 2006 Forecast has been reviewed in detail by the Directors of Coopers;



                                                                                                      Page 5
     the 2006 Forecast and the underlying assumptions have been reviewed by an independent
     accountant (Ernst & Young) for reasonableness and accuracy of compilation and application
     of assumptions;

     the 2006 Forecast has been prepared through a detailed forecasting process involving
     preparation of “ground up” forecasts by the management of individual operations and review
     by management of Coopers;

     senior management have advised that the overall performance of Coopers in the first three
     months of the 2006 financial year has been in line with the 2006 Forecast; and

     Coopers outperformed budget in the 2005 financial year.

Grant Samuel has no reason to believe that the 2006 Forecast reflects any material bias, either
positive or negative. However, the achievability of the 2006 Forecast is not warranted or
guaranteed by Grant Samuel. Future profits and cash flows are inherently uncertain. They are
predictions by management of future events that cannot be assured and are necessarily based on
assumptions, many of which are beyond the control of the company or its management. Actual
results may be significantly more or less favourable.

Grant Samuel has not undertaken any valuations of the properties owned by Coopers and, for the
purposes of this report, has relied on the independent property valuations commissioned by
Coopers for those properties.

In forming its opinion, Grant Samuel has also assumed that:

     matters such as title, compliance with laws and regulations and contracts in place are in good
     standing and will remain so and that there are no material legal proceedings, other than as
     publicly disclosed;

     the information set out in the Target’s Statement sent by Coopers to its shareholders is
     complete, accurate and fairly presented in all material respects;

     the publicly available information relied on by Grant Samuel in its analysis was accurate and
     not misleading;

     the Lion Nathan Offer will be implemented in accordance with its terms; and

     the legal mechanisms to implement the Lion Nathan Offer are correct and will be effective.

To the extent that there are legal issues relating to assets, properties, or business interests or issues
relating to compliance with applicable laws, regulations, and policies, Grant Samuel assumes no
responsibility and offers no legal opinion or interpretation on any issue.




                                                                                                   Page 6
3   Overview of the Beer Industry

    3.1   Overview

          There are three main stages in the making of beer: brewing, fermenting and bottling. The essential
          ingredient in beer is malt which is crushed at the brewery to produce grist. The brewing stage
          begins with the grist being mixed with hot water. Sugars and hops are added to the resulting liquid
          (called “sweet wort”) and the mixture is boiled. During boiling, the hops cause the sweet wort to
          become bitter, and protein in the wort coagulates. This protein is then removed and the wort is
          cooled and transferred to a fermenter. The first step in the fermenting stage is the addition of
          yeast, which converts the sugars into alcohol and carbon dioxide. After settling, the yeast is
          removed and the beer transferred to storage vessels. Hop extract, which gives beer its bitter
          flavour, may be added at this stage to provide hop aroma. Following time in storage, carbon
          dioxide gas is added to give beer its head and sparkling taste. Prior to bottling, the beer is passed
          through a filtration system to remove any remaining yeast and protein. Canned and bottled beers
          are pasteurised in their containers, while draught beer is pasteurised by means of a heat exchanger
          called a flash pasteuriser. Finally, the beer is packaged into bottles, cans and stainless steel casks,
          or kegs.

          There are a number of different types of beers on the market but the two most common are lagers
          and ales. Lagers and ales use different types of yeast in fermentation. An ale yeast has the
          characteristic of being “top fermenting” because the yeast gathers at the surface of the brew during
          the first few days of fermentation. To brew an ale, fermentation must take place at warmer
          temperatures for the yeast to multiply. Coopers’ ales are distinguishable from other ales by their
          ‘cloudy’ appearance, which arises from a secondary fermentation process in the bottle. Ales are
          usually higher in alcohol and will be noticeably fuller and more complex in flavour. During a
          lager fermentation, the lager yeast simply sinks to the bottom in a process known as “bottom
          fermenting”. Lager yeasts need cool temperatures during fermentation. Lagers tend to be lighter
          in colour and usually have a drier taste than ales. They are generally less alcoholic and complex.

          By contrast with a slow volume decline in the mainstream beer market (which is dominated by
          various lager brands), the premium beer category has grown considerably over the last 12 years.
          Premium beers are specialty beers (either lager or ales), generally with premium packaging, and
          command a higher price than standard beers.

    3.2   Australian Beer Market

          The first commercial brewery in Australia was established in 1794. The opening of the only
          Government brewery, in Parramatta in 1804, formally marked the start of the industry in Australia.
          Breweries were also established early in other States: Tasmania in 1824, Adelaide in 1836,
          Western Australia in 1837, Victoria in 1838 and Queensland in 1860.

          Early production in Australia was based on English methods of top fermentation, in which the
          yeast rises to the surface of the beer. These methods were later replaced by the continental-style
          bottom fermentation process, in which the yeast settles to the bottom of the tank to produce lager.

          Until 1996, the Price Surveillance Authority (“Authority”) was the governing body that controlled
          beer prices in Australia. Price increases had to be submitted and approved by the Authority. The
          Authority was abolished in September 1996 and there is currently no formal process in place for
          monitoring beer prices in Australia. Beer excises are increased by the rate of inflation every six
          months through the Federal Government and this price increase is usually passed on to the
          consumer through the brewers.




                                                                                                           Page 7
There are few major participants in the brewing industry in Australia, which is dominated by two
national brewing groups, Foster’s Group Limited (“Foster’s”) and Lion Nathan. Foster’s and Lion
Nathan accounted for around 94.6% of beer sold in Australia during 2005. Coopers is the sole
remaining State based independent brewer, based in South Australia. Beer drinkers are loyal to
brands throughout regions and each of the major brewers has large market shares in each of the
States. Imports currently represent 2.8% of the Australian market and no major co-brewing
arrangements currently exist in Australia. The market shares of Foster’s, Lion Nathan and
Coopers are summarised in the table below:

                                        Market Share – Australia (Volume %)
 Company                         1999          2000             2001          2002           2003      2004          2005
 Foster’s                        55.9           55.2            54.1           54.0          53.6      54.3          53.4
 Lion Nathan                     42.5           41.3            41.9           41.4          41.5      40.4          41.2
 Coopers                          1.3              1.5           1.7            1.7           1.9       2.3           2.6
 Other                            0.3              2.0           2.3            2.9           3.0       3.0           2.8
Source: Coopers.

Coopers’ market share in South Australia has been increasing over the last ten years, largely at the
expense of Lion Nathan:

                                   Market Share – South Australia (Volume %)
 Company                         1999          2000             2001          2002           2003      2004          2005
 Foster’s                        30.2           31.3            29.8           31.8          32.8      31.5          32.0
 Lion Nathan                     55.0           51.7            50.1           47.0          44.5      45.4          44.9
 Coopers                         14.3           15.6            18.1           18.4          20.1      20.7          21.1
 Other                            0.5              1.4           2.0            2.8           2.6       2.4           2.0
Source: Coopers.

Coopers Pale Ale is Coopers’ best selling beer in South Australia. In recent years, market share
has been increasing, largely at the expense of Lion Nathan’s Westend and Southwark brands:


                                                    Beer Market Shares
                                                           South Australia
                                                             1996-2005

                    60%


                    50%


                    40%
         Volume %




                    30%


                    20%


                    10%


                    0%
                          1996   1997       1998         1999    2000       2001      2002     2003   2004    2005

                                        Coopers Pale Ale                Westend/ Southwark combined

Source: Coopers.




                                                                                                                       Page 8
Over the last twenty years, actual consumption of beer has been declining, having reached a peak
in the 1980s. This trend reflects the slow decline of the mainstream beer market, which represents
the largest segment of the total beer market. By contrast, the premium beer market is expanding.
Total beer volumes are expected to gradually decline. However, price increases and the increasing
market share of premium beers are expected to increase total industry revenues.

Bottled and canned beer make up approximately 76% of beer consumption, with the remainder
being bulk (or ‘tap’) beer. Consistent with global trends, the premium beer category has been
growing strongly since 1997:


                                           Annual Premium Beer Volume Growth (incl Pale Ale)
                                                                      1997-2005


                                 45.0%

                                 40.0%
      Annual Volume Growth (%)




                                 35.0%

                                 30.0%

                                 25.0%

                                 20.0%

                                 15.0%

                                 10.0%

                                 5.0%

                                 0.0%
                                         1997   1998     1999      2000   2001    2002       2003   2004   2005

                                                       Australia                   Coopers

Source: Coopers.

Coopers’ management believes that the premium segment currently accounts for around 8% of the
national market, and is expected to grow its market share to exceed 10% of the market within the
next three years. Imports compete strongly in the premium beer market against locally produced
premium beers. Certain beers may be regarded as “premium” in certain States, whilst classified as
mainstream in other States.

Distribution arrangements with retailers and pubs are critical in the Australian beer market. The
dominance of Foster’s and Lion Nathan in the market provides them with significant power over
pricing and distribution of beer. About 25% of beer is sold through national retailers Coles Myer
and Woolworths, with the remainder sold by liquor chains and independents. Crown Lager
(owned by Foster’s) is by far the most popular premium beer sold in Australia, with sales equal to
the combined sales of the next four biggest brands:




                                                                                                                  Page 9
                                   Top 20 National Premium Brands (inc Pale Ale)
                                                     Moving Annual Turnover % Share
                                                          August 2004-July 2005
                 Coopers Stout      0.7%
              Carlsberg Green       0.8%
                 Grolsch Lager       1.0%
             Kilkenny Draught         1.2%
               Carlton Empire          1.4%
              Boags Strongarm          1.5%
                    Tookey Pils         1.8%
                  James Squire          1.8%
                   Stella Artois         1.9%
                         Becks            2.2%
             Guinness Draught               2.7%
              Carlton Prem Dry                      4.8%
               Coopers Spk Ale                       5.0%
                        Corona                         5.5%
                      Heineken                           6.0%
        Cascade Premium Lager                            6.0%
               Hahn Premium                               6.4%
         Boags Premium Lager                                 7.3%
         Coopers Org Pale Ale                                 7.7%
                  Crown Lager                                                                        27.2%

                               0%                  5%            10%     15%             20%   25%       30%
                                                                       Litres Sold (%)
Source: Coopers.




                                                                                                               Page 10
4   Profile of Coopers

    4.1   Background

          The Coopers brewing business was established in 1862 by Thomas Cooper. Successive
          generations of the Cooper family have operated the business since this time, and the company
          remains the last family owned Australian brewery of significance.

          For the first nineteen years following its establishment, Coopers was essentially operated as a
          home brewing business. In 1881 it was evident that larger scale production was required and
          Coopers’ first brewery was established at Leabrook in South Australia, producing ales and stouts.
          The company was incorporated in 1923.

          During the 1960s, Coopers had stable but static production of around 10 million litres per annum.
          In 1962, Coopers formed an alliance with SA Brewing, under which 25% of Coopers was
          exchanged for a 2.5% interest in SA Brewing. This was undertaken as a corporate defence
          strategy by the respective companies in response to a number of takeovers in the industry during
          this time.

          By the 1970s, Coopers’ production had increased to around 14 million litres per annum. However,
          during this time the introduction of higher beer excises gradually resulted in a deterioration in
          sales, leading to financial difficulties for the business. In the late 1970s, the company commenced
          production of home brewing kits in an attempt to sustain the business through this period.

          In 1962, Coopers began exporting small quantities of ale and stout to Boston in the United States.
          In 1979, this began to expand dramatically and sales to the United States continued until 1989,
          when the company decided to concentrate its efforts on the rapidly growing sales in Australia’s
          eastern States. By the late 1980s, Coopers production had increased to around 18 million litres per
          annum and sales of Coopers products were expanding outside South Australia. However, during
          the early 1990s the business again experienced financial difficulties with the contraction of the
          beer market, coupled with the effect of significant capital investment in non-performing assets
          such as radio operations and breakfast cereal manufacturing. The home brewing operations again
          sustained the business through this period.

          In 1993, Lion Nathan acquired SA Brewing. At the time, SA Brewing held a portfolio of hotels in
          South Australia with tied supply arrangements. Upon Lion Nathan’s acquisition of SA Brewing,
          this portfolio was sold. This had the effect of allowing Coopers to increase its market share in
          South Australia, mainly at the expense of Westend (SA Brewing’s major product).

          By 1998 the Leabrook brewery was operating at full capacity and in 2001, Coopers moved its
          brewing operations to a new $40 million state of the art facility at Regency Park, South Australia.

          In September 2001, the company invested in Morgan’s Brewing Company Pty Ltd (“Morgan’s
          Brewing”) through its acquisition of 60% of the company’s issued capital for $1.5 million. The
          company’s remaining 40% interest is held by two members of the company’s senior management
          team. Morgan’s Brewing operates in the home brew industry and predominantly markets to
          independent home brew outlets.

          During 2002, Coopers sold its malting operations to Ausbulk Limited for $15.2 million. The sale
          also involved the implementation of a five year renewable supply agreement for malted barley
          with Ausbulk Limited.

          The Leabrook Farms honey operation was sold at the end of October 2002 to Spring Gully Pickles
          for $0.5 million. The sale of Coopers’ malting and honey operations reflected a move away from
          non-core activities following the relocation of brewing operations to Regency Park.




                                                                                                      Page 11
      During 2003, the company purchased a 75% interest in a new company, Premium Beverages Pty
      Ltd (“Premium Beverages”). The company was created to undertake the national distribution and
      promotion of Coopers’ beer products outside South Australia and the Northern Territory. In
      addition, Premium Beverages distributes and promotes the imported product Budweiser. The
      remaining shareholding in Premium Beverages is owned by American Beverage Distributors Pty
      Ltd which initially held the licence to distribute Budweiser in Australia. Coopers increased its
      interest in Premium Beverages to 80% in 2004, and the licence to distribute Budweiser has since
      been assigned to Premium Beverages.

      Coopers currently has 106 employees.

4.2   Profile of Operations

      4.2.1 Beer

            Coopers produces eleven products comprising a range of lagers, ales and stout. The ales
            and stout are brewed using the natural conditioning method with secondary fermentation in
            the bottle. The lagers are chill-filtered.

            While a small percentage of Coopers beer is sold internationally (2% of volume), the two
            core markets for Coopers are South Australia and the eastern States of Australia. Coopers’
            beer sales by State are set out below:

                            Coopers 2004 Beer Sales by State                                     Coopers 2005 Beer Sales by State
                                   Volume based Contribution                                             Volume based Contribution
                                       Total Litres: 38,365,644                                              Total Litres: 44,935,414
                                                Overseas                                                           NT   Overseas
                                          NT                                                                              2%
                                       WA 2%      2%                                                               3%
                                                                                                             WA
                                       4%                                                                    5%
                            Victoria
                             10%

                                                                                              Victoria
                                                                                               11%


               New South Wales
                    14%
                                                                                    New South Wales
                                                                                                                                        South Australia
                                                                                         15%
                                                                                                                                             58%
                                                                  South Australia
                      Queensland                                       63%
                         5%
                                                                                                Queensland
                                                                                                   6%


            Source: Coopers.

            Coopers’ current objective is to continue to grow its premium beer sales interstate. While
            Coopers continues to invest in promotion and marketing strategies in South Australia, the
            market is reasonably mature. Further, the South Australian market for Coopers can be
            differentiated in that its beers, in particular Coopers Pale Ale, are consumed by mainstream
            beer drinkers. In contrast, premium beer drinkers are targeted in interstate markets.

            A brief outline of Coopers’ major brands is set out below:

                   Sparkling Ale – this is Coopers’ flagship beer and has been produced by Coopers
                   since 1862. Coopers Sparkling Ale contains no additives or preservatives and its
                   cloudy appearance is a unique identifying characteristic. The beer is Coopers’ best
                   selling beer outside South Australia and is primarily sold through hotels, restaurants
                   and liquor stores;

                   Original Pale Ale – this is Coopers’ other flagship beer and is brewed using the same
                   traditional method as Coopers Sparkling Ale. It has a cloudy appearance and retains a
                   full fruity ale flavour but with a lower alcohol content. The beer is Coopers’ best
                   seller in South Australia and is also primarily sold through hotels, restaurants and
                   liquor stores;

                   Premium Ale – Coopers Premium Ale is a chill-filtered ale which is targeted to the
                   premium and imported segment of the beer market. The beer is primarily sold
                                                                                                                                           Page 12
           through restaurants and cafes, and, with its attractive bottle, competes with other
           premium brands such as Southwark Premium, Heineken and Crown Lager;

           Best Extra Stout – Best Extra Stout is a robust full flavoured stout, with a unique rich
           and dark texture produced from specially roasted black malt. This product is
           marketed primarily as a winter drink aimed at all stout drinkers, with a higher than
           usual alcohol content; and

           Birrel Ultra Light Beer – Coopers Birrel Ultra Light Beer is sold primarily through
           supermarkets and contains only 0.5% alcohol. The beer is rich in colour with a full
           malty flavour.

      Coopers’ brewing operations represented 78.5% of total sales in the 2005 year.

4.2.2 Home Brew

      Coopers’ home brew operations have historically acted as a natural hedge to the core beer
      business, with home brew sales increasing with the contraction of the beer market and vice
      versa.

      The first Coopers home brew was developed and sold as an extra strong wort in a sterile
      bag during the late 1970s. By 1985 it had been developed into a complete starter kit
      containing all the necessary tools and ingredients to brew beer. Customers can now
      purchase numerous concentrate styles.

      Until the Morgan’s Brewing acquisition, Coopers’ principal distribution channel nationally
      was through the major supermarket chains. The acquisition of Morgan’s Brewing in 2001
      expanded Coopers’ home brew presence in independent home brew outlets and specialty
      stores around Australia.

      In recent years, Coopers’ market share has declined, as a result of strong competition from
      Foster’s and Lion Nathan. Since entering the market in 2003, Foster’s and Lion Nathan
      have achieved a collective market share of around 10%, at the expense of Coopers.
      Coopers currently has a market share in Australia of almost 80% and is the world’s largest
      manufacturer of home brewing products. Within Australia, Queensland is the biggest
      contributor of home brew sales.

      Home brew sales in 2005 were $23.4 million, accounting for 18.5% of total sales.

4.2.3 Malt Extract

      Coopers supplies liquid malt extract to a number of food manufacturers throughout the Asia
      Pacific region (including Mars Incorporated, Sanitarium Heath Food Company and several
      bakeries) and various microbreweries throughout the world.

      The malt business accounted for 3.8% of total Coopers’ 2005 sales.

4.2.4 Distribution

      Other than in South Australia and the Northern Territory, Coopers’ products were
      historically sold via agency relationships with various distributors. These arrangements
      were terminated in 2003 when Coopers acquired an initial 75% interest in Premium
      Beverages. The rationale behind the Premium Beverage acquisition was to take control of
      the distribution channel and better manage pricing and promotion interstate. To date, this
      strategy has been very successful for Coopers and has played a significant role in Coopers’
      volume and earnings growth. Coopers increased its shareholding in Premium Beverages to
      80% in 2004.




                                                                                            Page 13
                             Coopers’ packaged and bulk beers are sold through Premium Beverages in all States of
                             Australia except for South Australia and the Northern Territory, where Coopers has its own
                             sales team.

           4.3      Historical and Forecast Financial Performance

                    The consolidated historical and forecast financial and operating performance of Coopers is
                    summarised below:

                                                        Coopers – Financial Performance ($000s)
                                                                                          Year ended 30 June
                                                                2001          2002          2003            2004         2005        2006
                                                              (actual)      (actual)      (actual)        (actual)     (actual)   (forecast)
                     Beer Volume (000 litres)                  27,363        28,156        33,033          38,366       44,935     51,111
                     Home Brew Volume (000 kg)                  4,989         5,196            5,278        4,732        4,366       4,436

                     Operating revenue
                     Beer                                      42,534        43,725        56,920          78,403       99,352    117,387
                     Home Brewing                              19,292        21,731        22,930          21,360       23,367     23,364
                     Malt Extracts                              2,956         3,722            4,470        4,459        4,788       5,248
                     Discontinued operations                   30,257        33,010            4,989        2,747         (891)             -
                     Net operating revenue                     95,039       102,187        89,309         106,969      126,616    145,999

                     EBITDA                                    12,996        11,850        17,132          18,630       26,179     31,596
                     Depreciation & amortisation                (3,519)      (4,684)       (3,853)         (4,034)      (4,410)     (4,617)
                             1
                     EBITA                                      9,476         7,166        13,279          14,596       21,768     26,979
                     Amortisation of goodwill                     (18)         (101)          (91)            (91)         (91)       (91)
                     EBIT2                                      9,459         7,064        13,187          14,505       21,677     26,888
                     Net interest                               (1,164)      (2,459)       (1,282)           (843)        (676)       (473)
                     Group profit before tax                    8,294         4,606        11,905          13,662       21,001     26,415
                     Income tax credit (expense)                (3,040)      (1,637)       (2,768)         (4,068)      (6,395)     (8,002)
                     Profit after tax                           5,256         2,969            9,137        9,594       14,606     18,413
                     Outside equity interest                      (181)        (405)           (138)         (117)        (395)       (435)
                     Significant items (net of tax)                     -    14,823                   -            -      131               -
                     Net profit after tax                       5,074        17,387            9,000        9,477       14,342     17,978
                     Statistics:
                     Beer volume growth (%)                    11.7%          2.9%         17.3%           16.1%        17.1%       13.7%
                     Net operating revenue growth (%)          12.7%          7.5%        (12.6%)          19.8%        18.4%       15.3%
                     EBITDA margin (%)                         13.7%         11.6%         19.2%           17.4%        20.7%       21.6%
                     Effective tax rate (%)                    36.7%         35.5%         23.3%           29.8%        30.5%       30.3%
                     Dividends per share ($)                     0.84         1.20             2.57         1.95         4.05        6.00
                     Dividend payout ratio (%)                 22.1%          9.3%         38.9%           27.9%        38.2%       45.2%
                     Amount of dividend franked               100.0%        100.0%        100.0%          100.0%       100.0%     100.0%
                    Source: Coopers Annual Reports, Coopers 2006 Forecast. Numbers shown in this table may not add due to rounding.

                    In analysing Coopers’ financial performance, the following should be noted:

                            the 2002 fiscal year was one of significant rationalisation and consolidation for Coopers,
                            including the relocation of all manufacturing operations to the new facility at Regency Park
                            and the sale of the malting operations to Ausbulk Limited. While total sales volumes in the
                            brewing industry in Australia declined 1.4% for the year ended 30 June 2002 as a result of
1
    EBITA is earnings before net interest, tax, goodwill amortisation and significant items.
2
    EBIT is earnings before net interest, tax and significant items.


                                                                                                                                      Page 14
            the colder than average summer, Coopers’ beer sales increased 2.8% to $43.7 million. Home
            brewing revenues increased in 2002 (12.6%), following three years in which the business had
            experienced significant declines;

            the success of the Premium Beverages channel has been a key reason for the strong sales and
            earnings growth of Coopers since 2003. Premium Beverages has brought a more focussed
            approach to sales in the eastern States (which were previously the responsibility of third party
            agents with little motivation to aggressively promote and sell Coopers’ beers in preference to
            other products), promoting Coopers’ beers as premium brands in the eastern States,
            exploiting growth in the premium beer sector and increasing prices of Coopers products;

            home brew operations remained fairly flat over the period. The business was impacted by
            the entry to the sector of Lion Nathan and Foster’s, as well as the buoyant economy which
            resulted in a reduction in demand in the home brew sector;

            2006 forecast earnings assume continued market penetration in interstate markets with beer
            volume growth of 8% in South Australia and 20.5% interstate, and modest beer price
            increases. Stable prices and modest volume growth (1%) have been forecast for home brew’s
            existing products. In addition, the forecast for homebrew incorporates the commencement of
            a new contract to supply generic homebrew products. Detailed assumptions underpinning the
            2006 forecast are set out at Section 7.6 of the Target’s Statement; and

            Coopers has paid modest dividends to shareholders over the period, reflecting in part the
            significant investment in fixed assets and working capital required to fund the growth of the
            business during this time.

4.4   Financial Position

      The consolidated statement of financial position of Coopers is summarised below:

                                 Coopers – Statement of Financial Position ($000s)
                                                                                          As at 30 June
                                                                                 2004                       2005
                                                                               (actual)                   (actual)
       Receivables and prepayments                                              16,751                     19,864
       Inventories                                                               8,841                     13,860
       Creditors and provisions                                                (12,525)                   (16,112)
       Working capital                                                          13,067                     17,612
       Property, plant and equipment                                            52,146                     60,092
       Intangible assets                                                         1,554                      1,463
       Investments                                                                 123                        256
       Net tax liabilities                                                      (2,643)                    (2,650)
       Other (net)                                                                (403)                      (777)
       Total capital employed                                                   63,843                     75,997
       Net debt                                                                 (6,985)                    (7,372)
       Net assets                                                               56,859                     68,626
       Outside equity interest                                                  (1,642)                    (1,909)
       Net assets attributable to Coopers shareholders                          55,216                     66,716
        Statistics:
       Net tangible assets per share ($)                                        39.65                      48.22
       Gearing (net debt/total capital employed) (%)                            10.9%                       9.7%
       Working capital (% of net operating revenue)                             12.2%                      13.9%
      Source: Coopers Annual Reports. Numbers shown in this table may not add due to rounding.




                                                                                                                     Page 15
      The following issues are relevant to analysis of Coopers’ statement of financial position:

            inventories increased in 2005 as a result of a beer inventory build up, in preparation for a
            plant shut down of six weeks to install a new filter;

            intangible assets relate to goodwill, primarily arising from the Morgan’s Brewing acquisition;
            and

            net debt increased from June 2004 to June 2005 to meet working capital requirements.
            However, net debt remains low relative to assets and, in particular, earnings and Coopers
            enjoys a strong financial position.

4.5   Cash Flow

      Coopers’ historical cash flows are summarised below:

                                     Coopers – Statement of Cash Flows ($000s)
                                                                                   Year ended 30 June
                                                             2001         2002         2003          2004       2005
                                                           (actual)     (actual)     (actual)      (actual)   (actual)
       EBITDA from operations                               12,996       11,850       17,132       18,630     26,310
       Working capital & other adjustments                  (3,571)       4,374        (3,761)       1,670     (4,167)
       Cashflow from operations                              9,426       16,585       13,370       20,300     22,142
       Net proceeds/(payments) for property, plant
                                                           (23,759)      (6,436)       (4,693)      (8,666)   (11,709)
       and equipment
       Net proceeds/ (payments) for investments
                                                                  -      14,939             423        (42)         -
       (including controlled entities)
       Cashflow after investing                            (14,334)      25,087            9,100   11,591     10,433
       Net repayment of borrowings                          16,603      (11,086)       (7,276)      (7,288)      643
       Proceeds from issue of shares                              -            -            252        267          -
       Payments for share buy-back                                -            -               -    (1,389)         -
       Dividends received (paid)                            (1,221)      (2,079)       (2,300)      (2,526)    (2,962)
       Net interest paid                                    (1,925)      (2,459)       (1,089)        (623)      (440)
       Income tax paid                                      (4,823)      (3,836)            534     (2,680)    (6,389)
       Net cashflow                                         (5,700)       5,627            (780)    (2,649)     1,285
      Statistics:
      Capital expenditure/ EBITDA (%)                        183%          54%             27%        47%        45%
      Capital expenditure/ Net operating revenue (%)          25%            6%              5%        8%         9%
      Source: Coopers Annual Reports. Numbers in this table may not add due to rounding.

      Over the period, Coopers’ strong growth in earnings has been offset by high levels of capital
      expenditure and significant investment in working capital, reducing the level of free cash flow
      generated by the business.

      Capital expenditure items impacting on cash flow included the following:

            Cooper’s malting operations were sold in April 2002 to Ausbulk Limited for $15.2 million;

            in January 2002, the company sold the Leabrook property for $5.4 million (including a
            contingent payment of $1.2 million);

            1.8 hectares of land situated in the south western corner of the Regency Park property was
            purchased in December 2003 for $2.5 million;

            Coopers’ warehouse facilities were extended by an extra 4,600 square metres in 2004,
            increasing holding capacity by around one third; and

                                                                                                                 Page 16
            during 2005, Coopers added two new fermenting vessels and significantly increased the keg
            population to meet expanding beer volume demand. A new keg line was also installed to
            double the capacity of cleaning and filling kegs.

      Coopers is projecting that annual capital expenditure of $7-8 million per annum will be required
      over the next five years to support the expected continued strong growth of the business.

4.6   Taxation Position

      At 30 June 2005, Coopers had no carried forward capital losses and no carried forward income tax
      losses.

      Coopers had a franking account balance of approximately $29.5 million at 30 June 2005.

4.7   Capital Structure and Ownership

      As at 31 October 2005, Coopers had 1,353,358 shares on issue:

            15,553 “A” class shares;

            15,953 “B” class shares;

            1,234,761 “C” class shares; and

            87,091 “D” class shares.

      The A, B and D class shares provide the right to appoint directors to the Board of Coopers. The C
      class shares represent approximately 91% of total share capital but confer only limited rights to
      appoint a director.

      The Cooper family accounts for approximately 90% of the shares on issue:

                                         Coopers – Major Shareholders
                                                                          As at 31 October 2005
       Shareholders
                                                                    Total Shares      Issued Capital (%)
       Summit Lodge Pty Ltd                                             187,120                   13.8%
       Phyllis Mary Rondahl (deceased)                                  114,292                    8.5%
       Estate of DC Cooper (deceased)                                    85,410                    6.3%
       Upper Kensington Investments                                      73,716                    5.5%
       Prince Alfred College                                             70,106                    5.2%
       Annette Rosa Forrest                                              61,294                    4.5%
       James Macandrew Cooper                                            50,698                    3.8%
       M Cooper Nominees P/L                                             49,271                    3.6%
       Markus Pty Ltd                                                    38,500                    2.8%
       WT Cooper & RW Piper                                              35,370                    2.6%
       Subtotal – Top 10 Shareholders                                   765,777                   56.6%
       Other shareholders                                               587,581                   43.4%
       Grand Total                                                    1,353,358              100.0%
      Source: Coopers.

      On 2 September 2003, Coopers announced a share buy-back of up to 10% of the issued capital of
      the company at a buy-back price of $45.01 per share, with the buy-back applying to shares in each
      of the four classes of shares. The buy-back resulted in 2.2% of the issued capital being returned to
      the company.




                                                                                                      Page 17
Besides the share buy-back, there have been a number of share transfers in recent years:

                                         Coopers – Share Transfers
 Date                                            No. of Shares                             Price per share
 29 October 2004                                     5,997                                     $45.01
 30 September 2004                                   1,250                                     $45.01
 15 November 2003                                    1,000                                     $45.01
 12 December 2002                                     500                                      $16.27
 12 July 2001                                         650                                      $16.27
 4 April 2001                                         541                                      $16.27
 5 September 2000                                    2,000                                     $16.27
 11 August 2000                                       600                                      $16.27
 9 August 2000                                       1,317                                     $16.27
 4 August 2000                                        400                                      $16.27
Source: Coopers.
Note: There have also been a number of other share transfers that have occurred intermittently during this time for no
consideration but have had a deemed consideration for tax purposes of between $16.27 and $45.01.

Coopers’ constitution includes three tiers of pre-emptive rights that apply if a Coopers shareholder
seeks to sell shares (other than to a relative). Existing Coopers shareholders hold a first tier pre-
emptive right to acquire shares, followed by any superannuation fund of which more than 10% of
Coopers’ employees are members. Lion Nathan has a third tier pre-emptive right.




                                                                                                              Page 18
5   Valuation of Coopers

    5.1   Valuation Methodology

          5.1.1 Overview

               The most reliable evidence as to the value of a business is the price at which the business or
               a comparable business has been bought and sold in an arm’s length transaction. In the
               absence of direct market evidence of value, estimates of value are made using
               methodologies that infer value from other available evidence. There are four primary
               valuation methodologies that are commonly used for valuing businesses:

                    capitalisation of earnings or cash flows;

                    discounting of projected cash flows;

                    industry rules of thumb; and

                    estimation of the aggregate proceeds from an orderly realisation of assets.

               Each of these valuation methodologies has application in different circumstances. The
               primary criterion for determining which methodology is appropriate is the actual practice
               adopted by purchasers of the type of business involved.

               Capitalisation of earnings or cash flows is the most commonly used method for valuation of
               industrial businesses. This methodology is most appropriate for industrial businesses with
               a substantial operating history and a consistent earnings trend that is sufficiently stable to
               be indicative of ongoing earnings potential. The methodology is not particularly suitable
               for start-up businesses, businesses with an erratic earnings pattern or businesses that have
               unusual capital expenditure requirements. This methodology involves capitalising the
               earnings or cash flows of a business at a multiple that reflects the risks of the business and
               the stream of income that it generates. These multiples can be applied to a number of
               different earnings or cash flow measures including EBITDA, EBITA, EBIT or net profit
               after tax. These are referred to respectively as EBITDA multiples, EBITA multiples, EBIT
               multiples and price earnings multiples. Price earnings multiples are commonly used in the
               context of the sharemarket. EBITDA, EBITA and EBIT multiples are more commonly
               used in valuing whole businesses for acquisition purposes where gearing is in the control of
               the acquirer.

               Where an ongoing business with relatively stable and predictable cash flows is being
               valued, Grant Samuel uses capitalised earnings or operating cash flows as a primary
               reference point. Application of this valuation methodology involves:

                    estimation of earnings or cash flow levels that a purchaser would utilise for valuation
                    purposes having regard to historical and forecast operating results, non-recurring
                    items of income and expenditure and known factors likely to impact on operating
                    performance; and

                    consideration of an appropriate capitalisation multiple having regard to the market
                    rating of comparable businesses, the extent and nature of competition, the time period
                    of earnings used, the quality of earnings, growth prospects and relative business risk.

               The choice between EBITDA, EBITA and EBIT is usually not critical and should give a
               similar result. All are commonly used in the valuation of industrial businesses. EBITDA
               can be preferable if depreciation or non-cash charges distort earnings or make comparisons
               between companies difficult. EBITA avoids the distortions of goodwill amortisation.

               In determining a value for Coopers business, Grant Samuel has placed particular reliance
               on the EBITDA and EBITA multiples implied by the valuation range compared to the


                                                                                                      Page 19
      EBITDA and EBITA multiples derived from an analysis of comparable listed companies
      and transactions involving comparable businesses.

      Discounting of projected cash flows has a strong theoretical basis. It is the most commonly
      used method for valuation in a number of industries, including mining, and for the
      valuation of start-up projects where earnings during the first few years can be negative.
      Discounted cash flow valuations involve calculating the net present value of projected cash
      flows. The cash flows are discounted using a discount rate that reflects the risk associated
      with the cash flow stream. Considerable judgement is required in estimating future cash
      flows and the valuer generally places great reliance on medium to long term projections
      prepared by management. In addition, even where cash flow forecasts are available for up
      to, say, ten years, the terminal or continuing value is usually a high proportion of value.
      Accordingly, the value attributed to this terminal value becomes a critical determinant in
      the valuation. The net present value is typically extremely sensitive to relatively small
      changes in underlying assumptions, few of which are capable of being predicted with
      accuracy, particularly beyond the first two or three years. The judgemental nature of the
      assumptions that need to be made and the width of any value range mean that considerable
      care needs to be exercised in interpreting the results of discounted cash flow analysis.
      Notwithstanding these limitations, discounted cash flow valuations are commonly used in
      valuing industrial companies despite the explicit and relatively detailed assumptions as to
      expected future performance that need to be made.

      In the case of Coopers, detailed consolidated forecasts have not been prepared by
      Coopers beyond the year ending 30 June 2006. However, Coopers has prepared detailed
      forecasts for the three years ending 30 June 2008 for the single entity, Coopers Brewery
      Limited (ie. excluding Premium Beverages and Morgan’s Brewing). In addition, Coopers
      has projected beer volumes for each year to 30 June 2010. Grant Samuel has undertaken an
      indicative discounted cash flow (“DCF”) analysis, using a range of high level assumptions
      regarding free cash flow and future growth in free cash flow. Given the uncertainties
      regarding these assumptions, this indicative DCF analysis is essentially no more than a
      cross-check on the values estimated by reference to capitalisation of earnings.

      Industry rules of thumb are commonly used in some industries. These are generally used
      by a valuer as a “cross check” of the result determined by a capitalised earnings valuation
      or by discounting cash flows. While they are only used as a cross check in most cases,
      industry rules of thumb can be the primary basis on which buyers determine prices in some
      industries. Grant Samuel is not aware of any commonly used rules of thumb that would be
      appropriate to value the business of Coopers. In any event, it should be recognised that
      rules of thumb are usually relatively crude and prone to misinterpretation.

      Valuations based on an estimate of the aggregate proceeds from an orderly realisation of
      assets are commonly applied to businesses that are not going concerns. They effectively
      reflect liquidation values and typically attribute no value to any goodwill associated with
      ongoing trading. Such an approach is not appropriate in Coopers’ case.

5.1.2 Capitalisation Multiples

      Selection of the appropriate earnings multiple is usually the most judgemental element of a
      valuation. Definitive or even indicative offers for a particular asset or business can provide
      the most reliable support for selection of an appropriate earnings multiple. In the absence
      of meaningful offers it is necessary to infer the appropriate multiple from other evidence.

      The primary approach used by valuers is to determine the multiple that other buyers have
      been prepared to pay for similar businesses in the recent past. However, each transaction
      will be the product of a unique combination of factors, including:

           economic factors (eg. economic growth, inflation, interest rates) affecting the markets
           in which the company operates;



                                                                                             Page 20
                 strategic attractions of the business - its particular strengths and weaknesses, market
                 position of the business, strength of competition and barriers to entry;

                 rationalisation or synergy benefits available to the acquirer;

                 the structural and regulatory framework;

                 investment and sharemarket conditions at the time; and

                 the number of competing buyers for a business.

            A pattern may emerge from transactions involving similar businesses with sales typically
            taking place at prices corresponding to earnings multiples within a particular range. This
            range will generally reflect the growth prospects and risks of those businesses. Mature, low
            growth businesses will, in the absence of other factors, attract lower multiples than those
            businesses with potential for significant growth in earnings.

            An alternative approach used by valuers is to review the multiples at which shares in listed
            companies in the same industry sector trade on the sharemarket. This gives an indication of
            the price levels at which portfolio investors are prepared to invest in these businesses.
            Share prices reflect trades in small parcels of shares (portfolio interests) rather than whole
            companies. To convert sharemarket data to meaningful information on the valuation of
            companies as a whole, it is market practice to add a “premium for control” to allow for the
            premium which is normally paid to obtain control through a takeover offer. This premium
            is typically in the range 20-35%.

            The premium for control paid in takeovers is observable but caution must be exercised in
            assessing the value of a company or business based on the market rating of comparable
            companies or businesses. The premium for control is an outcome of the valuation process,
            not a determinant of value. Premiums are paid for reasons that vary from case to case and
            may be substantial due to synergy or other benefits available to the acquirer. In other
            situations premiums may be minimal or even zero. It is inappropriate to apply an average
            premium of 20-35% without having regard to the circumstances of each case. In some
            situations there is no premium. There are transactions where no corporate buyer is prepared
            to pay a price in excess of the prices paid by institutional investors through an initial public
            offering.

            Acquisitions of listed companies in different countries can be analysed for comparative
            purposes, but it is necessary to give consideration to differences in overall sharemarket
            levels and ratings between countries, economic factors (economic growth, inflation, interest
            rates) and market structures and the regulatory framework. It is not appropriate to adjust
            multiples in a mechanistic way for differences in interest rates or sharemarket levels.

            The analysis of comparable transactions and sharemarket prices for comparable companies
            will not always lead to an obvious conclusion as to which multiple or range of multiples
            will apply. There will often be a wide spread of multiples and the application of judgement
            becomes critical. Moreover, it is necessary to consider the particular attributes of the
            business being valued and decide whether it warrants a higher or lower multiple than the
            comparable companies. This assessment is essentially a judgement.

5.2   Valuation Summary

      Grant Samuel has valued the equity in Coopers in the range $384-433 million. This corresponds
      to a range of $284–320 per share. The valuation is summarised below:




                                                                                                     Page 21
                                      Coopers - Valuation Summary ($ millions)
                                                                  Report           Valuation Range
                                                                   Ref.          Low            High
       Coopers’ business operations                                 5.3           400.0        450.0
       Property                                                     5.6             2.4          2.4
       Outside equity interest                                      5.7           (6.8)         (7.7)
       Net borrowings at 30 June 2005                               5.8           (7.4)         (7.4)
       Payment of final dividend                                    5.9           (4.1)         (4.1)
       Value of equity                                                            384.2        433.3
       Fully diluted shares on issue (000s)                                       1,353        1,353
       Value per share ($)                                                       283.89       320.17


      Coopers has been valued by aggregating the estimated fair market value of Coopers’ business
      operations and other assets and deducting net borrowings and other liabilities.

      The valuation represents the estimated full underlying value of Coopers assuming 100% of the
      company was available to be acquired and includes a premium for control. The valuation assumes
      that Coopers was able to be acquired through an open, transparent and unrestricted process by any
      potential purchaser. It takes no account of the current restrictions in Coopers’ constitution on
      share ownership and transferability.

      The valuation reflects Coopers’ track record of rapid growth in earnings, the expectation of
      continued strong growth in the short to medium term, the attractiveness of the Coopers business to
      a number of market participants, and the significant market position of Coopers in South Australia.
      It takes into account the substantial synergies that should be available to potential acquirers of
      Coopers that already have established operations in Australia.

      The estimated full underlying value of Coopers of $384-433 million has been allocated across all
      1.353 million Coopers shares on issue, without differentiating between the different classes of
      shares. On this basis, the estimated full underlying value of Coopers is $284-320 per Coopers
      share.

5.3   Value of Coopers Business

      5.3.1 Summary

      The Coopers business has been valued in the range $400-450 million. The earnings multiples and
      net tangible asset multiples implied by the valuation of Coopers’ operating business and the
      valuation of the equity in Coopers are summarised below:




                                                                                                     Page 22
                               Coopers – Implied Valuation Parameters
                                                                                 Variable
                                                                                              Low     High
                                                                                ($ million)
 Multiple of EBITDA (before synergies)
 Historical (year ended 30 June 2005)                                             26.2        15.3x   17.2x
 Forecast (year ending 30 June 2006)                                              31.6        12.7x   14.2x
 Multiple of EBITA (before synergies)
 Historical (year ended 30 June 2005)                                             21.8        18.4x   20.7x
 Forecast (year ending 30 June 2006)                                              27.0        14.8x   16.7x
 Multiple of net profit after tax (before goodwill amortisation and synergies
 and after outside equity interest)
 Historical (year ended 30 June 2005)                                             14.4        26.6x   30.0x
 Forecast (year ending 30 June 2006)                                              18.1        21.3x   24.0x
 Multiple of NTA (at 30 June 2005)
 Geared                                                                           48.2         5.9x    6.6x
 Ungeared                                                                         55.1         5.2x    5.8x


In Grant Samuel’s view the implied multiples are high. However, they are reasonable, having
regard to the particular attributes of Coopers’ business. The valuation reflects factors such as:

     the performance of the Coopers business. Since the 2001 financial year, Coopers has almost
     doubled beer volumes, and has doubled beer revenues and earnings in what is essentially a
     static market. Further growth is expected in the short to medium term, on the basis that
     Coopers expects to maintain its existing market position in South Australia and increase its
     share of the growing premium category in other States;

     the attractiveness of Coopers’ business to a number of potential buyers (on the assumption
     that there were no impediments to the acquisition of Coopers by third parties). Coopers
     represents the last major independent brewer in Australia, offering potential acquirers a
     strong market position in South Australia and the potential to leverage Coopers’ beers
     through a national distribution network;

     the substantial synergies available to potential acquirers of Coopers. In addition to corporate
     head office and other administrative savings, synergies are likely to arise from plant
     rationalisation, efficiency gains in logistics, warehousing and procurement, and optimisation
     of sales and marketing functions and distribution networks. Allowing for these synergies in
     Coopers’ earnings significantly reduces the effective multiples implied by the valuation (see
     Section 5.4);

     the quality of Coopers’ existing beer brand portfolio (particularly Cooper’s Pale Ale and
     Sparkling Ale products), their strong market shares in South Australia and growing market
     shares in the premium beer market in the eastern States;

     the expected continued strong growth of the premium beer sector in Australia; and

     the strength of Coopers’ home brew business and its dominant market share nationally.

At the same time, it should be recognised that:

     while Coopers has a strong market position in the South Australian beer market, it is a
     relatively small participant in the total Australian beer market, with a national market share
     of only 2.6%. Therefore, although Coopers is an attractive business, none of the major
     players in the Australian beer market would view an acquisition of Coopers as a company
     transforming transaction, impacting on potential acquirers’ willingness to pay a premium
     reflecting “strategic value”; and



                                                                                                      Page 23
    the number of potential buyers is not extensive (even if it is assumed that there are no
    restrictions on the ability of potential buyers to acquire Coopers). The only significant
    participants in the Australian beer sector (other than Lion Nathan) are Foster’s and San
    Miguel Corporation. Offshore buyers could be interested in acquiring Coopers and private
    equity buyers could also be attracted to the business given its established business operations
    and cash flows. However, such buyers would be able to extract, at most, only modest
    synergies from acquiring Coopers, limiting their ability to pay a full price for Coopers.

5.3.2 Market Evidence

     Trading Multiples

     There are a large number of listed brewing companies operating in Australia and overseas.
     The following table presents average trading multiples for selected domestic and
     international brewing companies.




                                                                                            Page 24
                                    Share Market Ratings of Selected Comparable Brewing Companies3
                                                                Market             EBITDA Multiple4                  EBITA Multiple5
                                                             Capitalisation
                                                            (local currency                Forecast   Forecast           Forecast    Forecast
                                                                million)      Historical    Year 1     Year 2 Historical Year 1       Year 2
                         Australia
                         Foster’s Group Limited                  A$11,482        15.3        12.0      10.6      17.6       13.7       11.9
                         Lion Nathan Limited                      A$4,108        10.1         9.7       9.3      11.9       11.4       11.0
                         Average – simple                                        12.7      10.8       10.0        14.8      12.6       11.4
                                 - weighted                                      13.9      11.4       10.3        16.1      13.1       11.6

                         Asia
                         Kirin Brewery Company                 ¥1,237,527         7.7         7.8       7.5      12.5       13.3       12.5
                         Asahi Breweries Ltd                     ¥704,347         6.8         6.8       6.6       7.1       10.3        9.9
                         San Miguel Corporation               PHP 234,384         9.4         8.9       8.1      15.3       13.2       11.6
                         Sapporo Holdings Limited                ¥204,447        12.2        12.9      12.2      38.1       36.5       33.8
                         Tsingtao Brewery                      RMB9,969           9.7         8.5       7.6      19.3       15.9       13.9
                         Average – simple                                         9.1         9.0        8.4      18.4      17.8       16.3
                                 - weighted                                       8.2         8.1        7.7      13.8      14.4       13.3

                         United States
                         Anheuser-Busch                         US$32,660         9.5        10.4        9.9     12.1       13.7       13.2
                         Molson Coors Brewing                    US$5,440        12.7         7.5        6.8     22.0       12.5       10.9
                         Boston Beer Company, Inc                 US$387         12.0        11.0        9.6     14.9       15.5       14.8
                         Average – simple                                        11.4         9.6        8.8      16.3       13.9      13.0
                                  - weighted                                      9.9        10.0        9.5      13.5       13.6      12.9

                         South America
                         Grupo Modelo SA de CV              MXN 108,023           7.2         6.7        5.8       8.4      13.7       11.9
                         FEMSA (Fomento                       MXN 85,281          5.5         5.1        4.4       7.8        7.3       6.0
                         Economico Mexicano SA
                         de CV
                         Grupo Empresarial Bavaria        COP 12,155,245          8.9         7.9        7.5     10.6       10.1        9.5
                         Compania Cervecerias               CLP 823,330           9.6         9.2        8.3     16.0       14.2       11.4
                         Unidas SA
                         Average – simple                                         7.8         7.2        6.5      10.7      11.3         9.7
                                  - weighted                                      7.2         6.6        5.9       9.1      10.9         9.5

                         United Kingdom
                         SABMiller plc                          US$17,510         6.4         6.3       5.0       7.7        7.6        6.1
                         Scottish and Newcastle plc                £4,104        13.2        12.6      12.1      17.8       17.0       16.0
                         Average – simple                                         9.8         9.5        8.5      12.7       12.3      11.1
                                  - weighted                                      8.4         8.1        7.1      10.6       10.4        9.0

                         Europe
                         InBev NV/SA                           EUR18,907         11.0         7.7       6.8      15.7       10.7        9.3
                         Heineken NV                           EUR12,895          8.7         7.6       7.1      13.7       12.0       10.9
                         Carlsberg A/S                         DKK25,105          9.7         8.4       7.8      19.7       15.1       13.5
                         Quilmes Industrial (Quinsa)            USD1,097          5.3         n/a       n/a       8.0        n/a        n/a
                         Royal Grolsch NV                        EUR372           7.4         7.4       6.8      12.6       13.7       11.9
                         Average – simple                                         8.4         7.7        7.1      13.9      12.9       11.4
                                 - weighted                                       9.8         7.7        7.0      15.1      11.6       10.3
                        Source: Grant Samuel analysis6.



3
    The companies selected have a variety of year ends, therefore the data presented for each company is the most recent annual historical
    result plus the subsequent two forecast years.
4
    Represents gross capitalisation divided by EBITDA.
5
    Represents gross capitalisation divided by EBITA.
6
    Grant Samuel analysis is based on data obtained from IRESS, Bloomberg, Annual Reports, company announcements and, in the
    absence of company provided financial forecasts, brokers’ reports. Where company financial forecasts are not available, the median
    of the financial forecasts prepared by a range of brokers has generally been used to derive relevant forecast value parameters. The
    source, date and number of broker reports utilised for each transaction depends on analyst coverage, availability and corporate activity.


                                                                                                                                    Page 25
The multiples are based on sharemarket prices as at 28 October 2005, except for the
multiples for SABMiller plc (“SABMiller”) and Grupo Empresarial Bavaria (“Bavaria”)
are based on share prices as at 18 July 2005, the day prior to the announcement of
SABMiller’s takeover of Bavaria. InBev NV/SA’s share price is as at 15 July 2005, the
day prior to the announced takeover of Tinkoff. The multiples do not reflect a premium for
control.

There is considerable variability in the trading multiples of listed brewing companies, with
EBITDA multiples broadly in the range of 8-10 times across all the major international
brewers. Most large European and Asian brewers trade in a tighter range of EBITDA
multiples of 7-8 times.

The multiples for the Australian brewers, Foster’s and Lion Nathan, are generally higher
than for the international brewers. While the two companies enjoy a near duopoly position
in the Australian beer market, both Foster’s and Lion Nathan generate significant earnings
from wine assets which are likely to impact the trading multiples. Coopers is substantially
smaller than the major brewers in Australia. It does not enjoy the benefits of a dominant
national market position, including the resultant powerful negotiating position with the
retailers. On the other hand, it does have a strong market position in South Australia and is
expected to continue to grow in other States.

It should be noted that the value determined for Coopers is appropriate for the acquisition
of the company as a whole and, accordingly, incorporates a premium for control, whilst the
multiples set out above reflect the market prices at which shares trade on the sharemarket in
the absence of a takeover offer. A more detailed discussion of these companies is set out in
Appendix 1 to this report.

Transaction Evidence

There have been many transactions involving companies in the brewing industry in recent
years, both in Australia and internationally. The following table summarises the terms of
recent transactions for which earnings and pricing information were publicly disclosed:




                                                                                      Page 26
                                                              Selected Transaction Evidence
                                                                           Consideration                 EBITDA                              EBITA
                                                                                 7
                                                                                                         Multiple8                           Multiple9
                        Date      Target            Transaction                (local
                                                                             currency                     Forecast   Forecast                 Forecast   Forecast
                                                                                            Historical                          Historical
                                                                             millions)                     Year 1     Year 2                   Year 1     Year 2

                        Australia
                        May 00 J Boag & Sons        Acquisition by San           A$97        18.2            n/a        n/a      28.8           n/a        n/a
                                  Ltd               Miguel Corporation
                        Apr 98    Lion    Nathan    Acquisition of a 45%   NZD $4,287        10.6           9.7        9.0       12.9          11.9       11.2
                                  Limited           interest by Kirin
                                                    Brewery Company
                                                    Limited
                        South America
                        Jul 05  Grupo               Acquisition by                COP          8.4          7.5        7.1       10.0           9.6        9.0
                                Empresarial         SABMiller plc           16,678,455
                                Bavaria
                        Mar 04 Companhia de         Acquisition by          Real63,288       14.5          11.1        n/a        n/a           n/a        n/a
                                Bebidas     das     Interbrew SA
                                Americas
                        North America
                        Jul 04  Molson Inc          Acquisition by         CAD$6,228         11.6          10.0        9.2       13.1          11.2       10.2
                                                    Adolph Coors
                                                    Company
                        May 02    Miller Brewing    Divestment by            US$5,622          9.2          9.0        8.5       11.8          11.1       10.5
                                  Company           Phillip Morris to
                                                    SABMiller
                        United Kingdom
                        Dec 01   Carling            Divestment by            US$1,700          8.5          8.5        8.1        n/a          15.8       14.5
                                 Brewers            Interbrew SA to
                                                    Adolph Coors
                                                    Company
                        Jun 00    Bass Brewers      Acquisition by              £2,300         9.5          7.7        n/a       14.5          13.5        n/a
                                                    Interbrew SA
                        Europe
                        Feb 05    Birra    Peroni   Acquisition of 40%        EUR563         12.6          11.8       10.0       20.3          18.3       14.4
                                  Spa               interest by
                                                    SABMiller plc
                                                    following a 60%
                                                    acquisition in May
                                                    2003
                        Feb 04    Carlsberg         Acquisition by         DKK 37,250          8.6          n/a        n/a       15.2           n/a        n/a
                                  Breweries A/S     Carlsberg A/S of
                                                    Orkla’s ASA 40%
                                                    stake
                        Jan 04    Holsten           Acquisition by          EUR1,086           8.7          n/a        n/a       32.8           n/a        n/a
                                  Brauerei AG       Carlsberg A/S
                        Sep 03    Gabriel           Acquisition by            EUR477           8.8          8.9        n/a      n/a             n/a        n/a
                                  Sedlmayr          Interbrew SA
                                  Spaten-
                                  Franziskaner
                                  Bräu KGaA
                        May 03    BBAG              Acquisition by              €1,742         9.8          8.6        7.8       22.6          21.6       17.9
                                  Österreichische   Heineken NV
                                  Brau-
                                  Beteiligungs-
                                  Aktiengesellsch
                                  aft
                        Nov 02    Gilde Brauerei    Acquisition by                   €475      8.6          n/a        n/a        n/a           n/a        n/a
                                  AG                Interbrew SA
                        Feb 02    Hartwall     OY   Acquisition by              €2,259       10.0           n/a        8.3       13.6         n/a         11.2
                                  AB                Scottish &
                                                    Newcastle plc
                        Aug 01    Brauerei Becks    Acquisition by              €1,829         n/a         11.8        n/a        n/a          17.3        n/a
                                  & Co              Interbrew SA
                        Minimum                                                               8.4           7.5        7.1       10.0           9.6        9.0
                        Median                                                                9.5           9.0        8.4       14.5          13.5       11.2
                        Maximum                                                              18.2          11.8       10.0       32.8          21.6       17.9
                       Source: Grant Samuel analysis10.



7
    Implied equity value if 100% of the company or business had been acquired.
8
    Represents gross consideration divided by EBITDA.
9
    Represents gross consideration divided by EBITA


                                                                                                                                                         Page 27
                        A more detailed description of these transactions is contained in Appendix 2 to this report.
                        The transactions set out above imply a wide range of multiples. Transaction prices reflect a
                        variety of factors, including expected synergy benefits, the perceived strategic
                        attractiveness of the target, and expected or actual competition for the asset.

                        San Miguel Corporation’s acquisition of Tasmanian based J Boag & Sons Ltd (‘Boag”)
                        illustrates the higher multiples that can be paid for a successful premium beer brand, in a
                        growing premium market. At the time of the acquisition, Boag was the second largest
                        selling Australian premium beer brand nationally, behind Foster’s “Crown”. Caution must
                        be applied in assessing the high multiples of historical earnings implied by the Boag
                        acquisition. The takeover offer for Boag was dated 22 May 2000. Grant Samuel’s
                        historical earnings multiples are based on earnings for the year ended 30 June 1999. Lower
                        multiples would apply if 2000 earnings were used as “quasi-historical” earnings (given that
                        the takeover offer was made only around 5 weeks before the end of the 2000 financial
                        year). No information is publicly available in relation to Boag’s prospective earnings at the
                        time of the acquisition: the high multiples of historical earnings may in part also have
                        reflected expectations of substantial earnings growth in the short term.

       5.4      Synergies

                Grant Samuel’s valuation of Coopers represents the full underlying value of the business and
                includes a premium for control. The premium comprises two elements:

                      a premium for acquiring a controlling interest; and

                      a premium for synergies available to an acquirer.

                Accordingly, Grant Samuel’s analysis has included an assessment of the likely synergies available
                to an acquirer, and a judgement as to the amount of these synergies for which an acquirer would be
                prepared to pay. Premiums are paid for a variety of reasons. They can be substantial when there
                are extensive synergy benefits or perceived strategic benefits for the acquirer. In some cases,
                particularly when there are few buyers, there may be little or no premium paid.

                It is reasonable to expect that the Coopers business would be attractive to current participants in
                the Australian beer market, if it was available to be acquired through an open, transparent process.
                Given the structure of the Australian beer market, Lion Nathan and Foster’s are the most obvious
                buyers of Coopers. However, San Miguel Corporation would also be a potential buyers of
                Coopers (given its ownership of Boag and extensive other food/beverage interests in Australia).
                Other international brewers could also be keen to establish a presence in Australia to facilitate the
                distribution of other products, but are unlikely to be able to derive synergies equal to those
                potentially available to existing participants in the Australian market.

                The synergies available to Lion Nathan through the acquisition of Coopers are significant. Cost
                savings can be obtained primarily in the areas of processing and manufacturing costs (through
                consolidation of production at Coopers’ brewery at Regency Park and closure of Lion Nathan’s
                West End brewery which is currently underutilised), lower procurement costs available through
                better buying terms, and the removal of the majority of administration expenses. Coopers
                management has estimated that these cost savings (pre-tax) could be of the order of $17 million
                per annum. Additionally, Coopers’ management estimates that Lion Nathan could generate (pre-
                tax) revenue synergies of $3 million per annum, through the distribution of Coopers’ products
                through the Lion Nathan national distribution network. Brokers’ estimates of the total pre-tax
                synergies available to Lion Nathan range from $9 to $35 million per annum.


10
     Grant Samuel analysis is based on data obtained from IRESS, Bloomberg, Annual Reports, company announcements, transaction
     documentation and, in the absence of company provided financial forecasts, brokers’ reports. Where company financial forecasts are
     not available, the median of the financial forecasts prepared by a range of brokers has generally been used to derive relevant forecast
     value parameters. The source, date and number of broker reports utilised for each transaction depends on analyst coverage,
     availability and corporate activity.


                                                                                                                                    Page 28
      Generally, assessments of the underlying value of a business include only those synergies
      available to more than one buyers, and do not include any special benefits available to one buyer
      only. Apart from the closure of Lion Nathan’s existing South Australian brewery, Grant Samuel
      considers that most of the synergies available to Lion Nathan would be available to other potential
      buyers of Coopers with an established presence in Australia. Based on the analysis prepared by
      Coopers management as to the likely synergies available to Lion Nathan, Grant Samuel estimates
      that approximately $5 million of the $20 million synergies are “special benefits” available only to
      Lion Nathan. Accordingly, around $15 million of synergies should be available to more than one
      buyer of Coopers.

      It is not appropriate to include 100% of these “general” synergies in the valuation. Acquirers will
      rarely pay 100% of potential synergies, given the risks inevitably associated with synergy
      realisation, including potential integration issues and timing delays. Grant Samuel has reviewed
      the projected synergies and, having regard to the different categories of projected synergy benefit,
      concluded that it is reasonable for the purposes of the valuation to assume annual synergies of
      around $10 million (pre-tax).

      Adjusting Cooper’s earnings for annual pre-tax synergies of $10 million significantly reduces the
      multiples implied by Grant Samuel’s valuation, as set out below:

                        Coopers – Implied Valuation Parameters Including Synergies
                                                                                   Variable
                                                                                                Low     High
                                                                                  ($ million)
       Multiple of EBITDA (adjusted for synergies)
       Historical (year ended 30 June 2005)                                         36.2        11.1x   12.4x
       Forecast (year ending 30 June 2006)                                          41.6         9.6x   10.8x
       Multiple of EBITA (adjusted for synergies)
       Historical (year ended 30 June 2005)                                         31.8        12.6x   14.2x
       Forecast (year ending 30 June 2006)                                          37.0        10.8x   12.2x
       Multiple of net profit after tax (before goodwill amortisation and after
       outside equity interests, adjusted for synergies)
       Historical (year ended 30 June 2005)                                         21.4        17.9x   20.2x
       Forecast (year ending 30 June 2006)                                          25.1        15.3x   17.3x


      The full extent of the synergies, including those specific to Lion Nathan, may be significantly
      higher, giving meaningful upside to an acquirer even at the valuation level of $400-450 million.

5.5   Indicative Discounted Cash Flow Analysis

      Grant Samuel has undertaken an indicative DCF analysis as a cross-check of the valuation
      conclusions based on capitalisation of earnings.

      Given the strong growth in revenue and earnings in recent years, and the expectations of continued
      strong growth, at least in the short term, the DCF approach is in theory particularly well suited to
      valuing Coopers’ business. However, Coopers has not prepared detailed internal consolidated
      forecasts beyond the 2006 Forecast. No forecasts regarding long run profitability and growth
      rates, and working capital required to support growth in sales, have been provided by Coopers to
      Grant Samuel. However, Coopers’ management has provided the following information to Grant
      Samuel:

           projected beer volumes to 2008;

           detailed forecasts for the Coopers’ parent entity only (ie. excluding Premium Beverages and
           Morgan’s Brewing) for the three years ending 30 June 2008;

           capital expenditure forecasts for the five years ending 30 June 2010; and

           consolidated revenue and EBITDA projections for the two years ending 30 June 2008.

                                                                                                        Page 29
Accordingly, for the purposes of the valuation, Grant Samuel has developed high level financial
models based on a variety of possible scenarios for the future financial performance of the
Coopers business. The models project nominal ungeared after tax cash flows for the 10 years to
30 June 2015, and estimate a terminal value at the end of that period.

Grant Samuel has developed an indicative base case scenario based on Coopers’ forecast for the
2006 financial year and various assumptions for subsequent years. The major assumptions
underlying the base case scenario are as follows:

    beer volume growth of 13.7% in 2006, followed by 7% growth for 2007 and 2008.
    Subsequent volume growth rates are assumed to decline by 1% each year until 2015;

    beer price growth of 3.9% for 2006 and 2.0% per annum for subsequent years;

    home brew sales growth of 0% for 2006 and 1.0% per annum from 2007;

    malt extract sales growth of 9.6% for 2006 and 3.0% per annum from 2007;

    EBITDA margins growing from the actual margin of 20.7% for 2005 to 21.6% for 2006 and
    thereafter growing slowly to reach 24% by 2009;

    long run growth in free cash flows after 2015 of 2.5% per annum;

    synergies of $10 million per annum increasing annually by inflation;

    working capital equal to 16% of sales;

    capital expenditure forecasts as provided by Coopers for the period to 2010, with long run
    capital expenditure of $7 million per annum from 2011, increasing annually by inflation; and

    inflation of 2.5%.

Grant Samuel’s assumption of annual synergies of $10 million reflects the judgement that a
notional acquirer of Coopers might make to take account of the risks associated with realising the
synergies, including potential integration issues and timing delays. However, it should be
recognised that this is a very subjective judgement by Grant Samuel necessarily made without any
direct knowledge of the savings and other benefits to Lion Nathan or other potential purchasers.
There would be restructuring costs associated with generating many of the synergy benefits. Grant
Samuel has assumed that restructuring costs equal to 75% of the synergies are incurred in 2006.

The earnings and cash flow outcomes for the indicative base case scenario are set out in the
following table:

                  DCF Analysis – Indicative Base Case Scenario Summary ($000s)
                                                         Year ending 30 June
                                        2006            2007             2008          2015
 Beer volumes (000 litres)             51,111          54,688           58,516        72,592
 Revenue                               145,999        157,119          169,227        231,650
 EBITDA (incl. synergies)              34,096          46,137          49,172         67,780
 EBIT                                  29,479          41,137          43,172         59,860
 Capital Expenditure                    7,920          8,000            8,000          7,920
 Free Cash Flow                        14,231          24,017          26,283         40,895


The indicative base case scenario does not represent Grant Samuel’s forecasts of the future
financial performance of the business. Grant Samuel gives no undertaking and makes no warranty
regarding Coopers’ future financial performance. Such future performance is subject to
fundamental uncertainty. Rather, the indicative base case scenario has been developed purely to
allow Grant Samuel to assess the impact on calculated net present values of alternative
assumptions regarding the future financial performance of Coopers.

                                                                                           Page 30
Net present values have been calculated using discount rates of 9.0-10.0%. These rates represent
an estimate of a nominal after tax weighted average cost of capital appropriate for Coopers’
business, based on the following assumptions:

     a debt to equity ratio of 25%, having regard to the gearing levels of selected comparable
     listed domestic and international companies;

     a beta factor in the range of 0.8-1.0, having regard to the beta factors of selected comparable
     domestic and international companies. The appropriate beta for Coopers is arguably higher
     than for mainstream brewers due to the greater systematic risks associated with the premium
     beer market than the mainstream beer market, and the fact that Coopers is substantially
     smaller than the large domestic and international beer companies;

     a risk-free rate of 5.4% based on the current Australian Government 10 year bond rate;

     a cost of debt of 7%, based on current market rates (ie. a premium of 1.6% over the risk-free
     rate); and

     a market risk premium of 6%.

Using discount rates of 9-10% and the indicative base case scenario, the DCF analysis generates
net present values in the range $398-463 million. Grant Samuel has analysed the sensitivity of
calculated net present values to changes in key valuation assumptions. The results of the DCF
sensitivity analysis are set out below:

                                 Summary of DCF Sensitivity Analysis ($ millions)
                           Terminal             Annual            Annual              Annual          Long Run
                          Growth Rate          Beer Price        Decline in          Synergies        EBITDA
                                                Growth          Beer Volume                            Margin
                           2%         3%      1%         3%     0.5%       1.5%    $8m      $12m    23%      25%
Discount rate – 9%       443.9       484.4   439.3      487.6   495.1      447.5   442.6    482.6   446.4   477.0
Discount rate – 10%      385.1       412.7   378.8      418.6   424.2      385.7   380.7    415.3   384.3   409.9


The sensitivity analysis is summarised in the chart below:


                             Discounted Cash Flow - Sensitivity Analysis




       Grant Samuel Valuation



             EBITDA Margin



                     Synergies



  Beer Volume Growth Decline



           Beer Price Growth



        Terminal Growth Rate


                             $350                $400                   $450               $500             $550
                                                                  (millions)




                                                                                                            Page 31
      The sensitivities analysed are arbitrary but reflect the concerns that potential buyers of Coopers
      would have. The sensitivities analysed do not, and do not purport to, represent possible best and
      worst case scenarios that Coopers could face. They are simply theoretical indicators of the
      sensitivities of the indicative base case. These sensitivities are indicative of the wide range of
      potential outcomes that could be faced by Coopers and more extreme outcomes are quite
      conceivable. The indicative base case is essentially static in nature and cannot adequately reflect
      the potential for change in multiple variables.

      The valuation range for Coopers’ business of $400-450 million is consistent with the indicative
      DCF analysis summarised above.

      It should be recognised that the calculated net present values are extremely sensitive to small
      changes in assumptions regarding margins, revenue growth and capital expenditure for periods
      many years into the future. This sensitivity to assumptions regarding future operational
      performance is accentuated by the fact that the terminal value (the value contributed by cash flows
      generated after 2015) contributes a high proportion of the overall value. The terminal value
      contributes around 52-57% of total net present value, and represents multiples of 8-9 times 2015
      EBITDA.

      The DCF analysis allows the calculation of a wide range of values, using assumptions that are
      reasonably credible. Adoption of only slightly more optimistic assumptions regarding revenue
      growth and long run EBITDA margins than those used by Grant Samuel will result in the
      calculation of values substantially greater than Grant Samuel’s valuation range. However, Grant
      Samuel believes that the assumptions adopted in its indicative DCF analysis are assumptions that a
      potential acquirer of Coopers could reasonably adopt. Overall, Grant Samuel believes that the
      indicative DCF analysis supports Grant Samuel’s valuation range for Coopers’ business of $400-
      450 million

5.6   Property

      Coopers has surplus land at the Regency Park site in Adelaide. Based on recent independent
      valuations prepared for Coopers, Grant Samuel has adopted a value for the land of $2.4 million.

5.7   Outside Equity Interests

      Outside equity interests relate to interests held by third parties in partially owned subsidiaries of
      Coopers. Third parties have interests of 20% in Premium Beverages and 40% in Morgan’s
      Brewing. For the purpose of this report, a value of $6.8-7.7 million has been attributed to these
      outside interests based on forecast earnings for the 2006 financial year.

5.8   Net Borrowings

      Coopers had net borrowings of $7.4 million as at 30 June 2005.

5.9   Final Dividend

      On 4 November 2005, Coopers paid a final dividend of $3.00 per share for the 2005 financial year.
      This equates to a total payment of $4.1 million.




                                                                                                    Page 32
6   Evaluation of the Lion Nathan Offer

    6.1   The Lion Nathan Offer is Not Fair

          Grant Samuel has valued Coopers in the range $284-320 per share. This value is the aggregate of
          the estimated market value of Cooper’s business and the estimated realisable value of other assets,
          after deducting external borrowings and non-trading liabilities. This valuation reflects the full
          underlying value of Coopers and includes a premium for control.

          The Lion Nathan Offer of $260 is below the valuation range. Accordingly, the Lion Nathan Offer
          is not fair.

    6.2   The Lion Nathan Offer is Not Reasonable

          In the case of some takeovers there are circumstances that suggest that, whilst the offer is not fair,
          it is nonetheless reasonable, and shareholders would be justified in accepting it.

          Factors to be considered in assessing whether the Lion Nathan offer might be reasonable,
          notwithstanding that it is not fair, include:

               the existing shareholding structure of Coopers and the terms of Coopers’ constitution in
               relation to share transferability;

               the prospects of an alternative offer; and

               the likely market price and liquidity of shares in Coopers in the absence of the takeover offer.

          The following factors suggest that realising $260 per share could be attractive to Coopers
          shareholders:

               Coopers shareholders who wish to sell shares are required to accept a price nominated by
               Coopers’ auditors. The Lion Nathan Offer represents a considerable premium to the
               nominated prices of $16.27-45.01 at which share transfers have occurred since December
               2002. Whilst the nominated price would almost certainly now be significantly higher, it is
               possible that in the absence of the Lion Nathan Offer the nominated price would be well
               below $260 per share;

               although a superior offer from Lion Nathan is possible, the prospect of an alternative bidder
               making a more attractive bid for Coopers appears remote:

               •    Coopers’ constitution deters bidders from making a takeover offer for Coopers:

                    -     under the pre-emptive rights regime set out in Coopers’ constitution, any shares
                          must first be offered to existing shareholders, second to Coopers’ superannuation
                          fund, and third to Lion Nathan, before they can be acquired by an external party;

                    -     the constitution effectively precludes brewing companies operating in competition
                          with Coopers (other than Lion Nathan) from owning shares in Coopers;

               •    since the announcement of the Lion Nathan Offer on 1 September 2005, potential
                    counter bidders have had two months to make a higher offer for Coopers. To date, no
                    such offers have been made;

               Coopers is an unlisted public company, and accordingly, there is no formal market for share
               exchanges to take place. Therefore, Coopers shares are extremely illiquid. In this context, a
               reasonably priced takeover offer close to Coopers’ estimated underlying value may be
               attractive;

               Grant Samuel’s assessment of the value of Coopers incorporates considerable value for part
               of the substantial synergies available to potential purchasers of Coopers. These synergies can
               only be realised through a takeover offer or other change of control transaction. Given the

                                                                                                         Page 33
       share transfer and ownership restrictions embedded in Coopers’ constitution, such a change
       of control transaction (other than the Lion Nathan Offer) is unlikely to occur. In the absence
       of a change of control transaction the synergies would not be realised and shareholders would
       not have access to the value of $284-320 per Coopers share estimated by Grant Samuel.

However, there is uncertainty as to whether Coopers shareholders who accept the Lion Nathan Offer
in its current form (ie. subject to various conditions) will realise $260 per share. Grant Samuel
understands that Coopers shareholders who accept the Lion Nathan Offer will be subject to the pre-
emption regime, including the process by which Coopers’ auditors nominate a transfer price.
Coopers’ constitution provides that shareholders who elect to sell make an irrevocable election to be
bound by the pre-emptive process. The Lion Nathan Offer remains subject to a number of
conditions and will lapse if one or more of the conditions is not fulfilled or waived. In these
circumstances, shareholders who had already accepted the Lion Nathan Offer would still be bound
to sell their shares through the pre-emptive process, at a price nominated by Coopers’ auditors. It is
reasonable to expect, while the Lion Nathan Offer is on foot, that the nominated transfer price would
be equal to the offer price of $260 per share, but in the absence of the Lion Nathan Offer the
nominated price could be well below $260 per share. Accordingly, shareholders who accept the
Lion Nathan Offer while it remains subject to conditions cannot be certain of realising $260 per
share.

Shareholders should also be aware that there is continuing litigation regarding the status of Lion
Nathan’s pre-emptive rights and its right to be a shareholder in Coopers. Subject to a decision of the
Federal Court of Australia, Coopers’ intends to hold an Extraordinary General Meeting on
29 November 2005 at which shareholders will vote on a special resolution to amend the Coopers
constitution to remove Lion Nathan’s pre-emptive rights and its right to be a shareholder in Coopers.
Until these matters are resolved, the Lion Nathan Offer remains subject to uncertainty, and
consequently shareholders who accepted the Lion Nathan Offer could not be certain of realising
$260 per share.

Further, there are alternatives for shareholders to consider. Coopers has announced its intention to
undertake an immediate 15% buy-back at $260 per share and to implement further buy-backs in the
future. However, in considering such alternatives shareholders should be aware that:

    there is no certainty of receiving $260 for all shares in the buy-back. If the aggregate number of
    shares tendered into the buy-back substantially exceeds 15% of total Coopers shares on issue,
    there could be a material scale back and shareholders could be left with a significant residual
    shareholding;

    the nominated price that would apply should shareholders seek to realise any residual
    shareholding through the pre-emptive rights process could be significantly less than $260 per
    share; and

    based on the proposed formula to determine future buy-back prices, future buy-backs will be at
    prices substantially higher than $260 per share, if Coopers achieves its 2006 earnings forecasts
    and delivers further earnings growth in subsequent years. For example, the 2006 buy-back
    price will be around $314 per share if Coopers achieves its 2006 earnings forecast. However,
    shareholders should understand that future buy-backs, and the extent to which shareholders will
    be able to realise their shareholdings through future buy-backs, are uncertain. Future buy-backs
    will be subject to a range of constraints (including the availability of surplus free cash, the
    extent of other capital requirements, any financing constraints and the need to maintain an
    appropriate capital structure). In essence future buy-backs will only take place at the discretion
    of the Coopers directors, and the quantum may be relatively limited.

In such complex and uncertain circumstances, it is not appropriate to be prescriptive. However,
taking into account all of the factors outlined above, it is Grant Samuel’s opinion that:

    the Lion Nathan Offer could be attractive to shareholders with a requirement for short term
    liquidity in respect of most or all of their shareholdings. However, it would not be sensible to
    accept the Lion Nathan Offer until it became unconditional; and


                                                                                               Page 34
        for Coopers shareholders with limited or no short term liquidity requirements, or a greater
        appetite for investment risk in relation to their Coopers shareholdings, rejection of the Lion
        Nathan Offer (even if unconditional) may be more attractive. Such shareholders would have an
        opportunity to realise greater value through future buy-backs at significantly higher prices
        (although this is far from certain). Moreover, the current buy-back would provide an
        opportunity for these shareholders to realise at least part of their investment in Coopers, should
        that be their preference.

        In any event, shareholders should recognise that acceptance of the current Lion Nathan Offer
        would significantly reduce the prospects of negotiating a higher offer price, either in the short
        term or at some stage in the future. Lion Nathan is clearly keen to acquire Coopers. Given the
        unique strategic benefits that Lion Nathan could derive from ownership of Coopers, the value of
        Coopers to Lion Nathan may well exceed Grant Samuel’s valuation of Coopers in the range
        $284-320 per share. An increase in the Lion Nathan Offer is a credible possibility, particularly
        if Lion Nathan receives limited or no acceptances of its offer. However, shareholders should
        understand that such a strategy involves risks and there can be no certainty that a higher offer
        would be forthcoming.

        Accordingly, Grant Samuel has concluded that the Lion Nathan Offer is not reasonable.
        However, the Lion Nathan Offer would be reasonable for shareholders with a requirement for
        short term liquidity for all or most of their shareholdings, should the Lion Nathan Offer become
        free of conditions.

6.3   Shareholder Issues

      The decision of each shareholder as to whether to accept the Lion Nathan Offer is a matter for
      individual shareholders based on each shareholder’s views as to value and future market
      conditions, risk profile, liquidity preference, investment strategy, portfolio structure and tax
      position. In particular, taxation consequences may vary from shareholder to shareholder. If in any
      doubt, shareholders should consult an independent professional adviser.




                                                                                                   Page 35
7   Qualifications, Declarations and Consents

    7.1   Qualifications

          The Grant Samuel group of companies provide corporate advisory services (in relation to mergers
          and acquisitions, capital raisings, debt raisings, corporate restructurings and financial matters
          generally), property advisory services and manages specialised funds (property development,
          pubs). The primary activity of Grant Samuel & Associates Pty Limited is the preparation of
          corporate and business valuations and the provision of independent advice and expert’s reports in
          connection with mergers and acquisitions, takeovers and capital reconstructions. Since inception
          in 1988, Grant Samuel and its related companies have prepared more than 340 public independent
          expert and appraisal reports.

          The persons responsible for preparing this report on behalf of Grant Samuel are Robert Johanson
          BA LLM MBA, Hannah Crawford BCom LLB CA ASIA and Marisa Leone BBus ASIA. Tina
          Fendl BCom CFA assisted with the preparation of parts of this report. Each of the above persons
          has a significant number of years of experience in relevant corporate advisory matters and is an
          authorised representative of Grant Samuel pursuant to its Australian Financial Services Licence
          under Part 7.6 of the Corporations Act.

    7.2   Disclaimers

          It is not intended that this report should be used or relied upon for any purpose other than as an
          expression of Grant Samuel’s opinion as to whether the Lion Nathan Offer is fair and reasonable
          to shareholders. Grant Samuel expressly disclaims any liability to any Coopers shareholder who
          relies or purports to rely on the report for any other purpose and to any other party who relies or
          purports to rely on the report for any purpose whatsoever.

          This report has been prepared by Grant Samuel with care and diligence and the statements and
          opinions given by Grant Samuel in this report are given in good faith and in the belief on
          reasonable grounds that such statements and opinions are correct and not misleading. However,
          no responsibility is accepted by Grant Samuel or any of its officers or employees for errors or
          omissions however arising in the preparation of this report, provided that this shall not absolve
          Grant Samuel from liability arising from an opinion expressed recklessly or in bad faith.

          Grant Samuel has had no involvement in the preparation of the Target’s Statement issued by
          Coopers and has not verified or approved any of the contents of the Target’s Statement. Grant
          Samuel does not accept any responsibility for the contents of the Target’s Statement (except for
          this report).

    7.3   Independence

          Grant Samuel and its related entities do not have at the date of this report, and have not had within
          the previous two years, any shareholding in or other relationship with Coopers or Lion Nathan that
          could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in
          relation to the Lion Nathan Offer.

          Grant Samuel had no part in the formulation of the Lion Nathan Offer. Its only role has been the
          preparation of this report.

          Grant Samuel will receive a fee of $350,000 for the preparation of this report. This fee is not
          contingent on the outcome of the Lion Nathan Offer. Grant Samuel’s out-of-pocket expenses in
          relation to the preparation of the report will be reimbursed. Grant Samuel will receive no other
          benefit for the preparation of this report.

          Grant Samuel considers itself to be independent in terms of Practice Note 42 issued by the ASIC
          (previously known as Australian Securities Commission) on 8 December 1993.




                                                                                                        Page 36
7.4   Declarations

      Coopers has agreed that it will indemnify Grant Samuel and its employees and officers in respect
      of any liability suffered or incurred as a result of or in connection with the preparation of the
      report. This indemnity will not apply in respect of the proportion of any liability found by a court
      to be primarily caused by any conduct involving gross negligence or wilful misconduct by Grant
      Samuel. Coopers has also agreed to indemnify Grant Samuel and its employees and officers for
      time spent and reasonable legal costs and expenses incurred in relation to any inquiry or
      proceeding initiated by any person. Where Grant Samuel or its employees and officers are found
      to have been grossly negligent or to have engaged in wilful misconduct Grant Samuel shall bear
      the proportion of such costs caused by its action. Any claims by Coopers are limited to an amount
      equal to the fees paid to Grant Samuel.

      Advance drafts of this report were provided to Coopers and its advisers. Certain changes were
      made to the drafting of the report as a result of the circulation of the draft report. There was no
      alteration to the methodology, evaluation or conclusions as a result of issuing the drafts.

7.5   Consents

      Grant Samuel consents to the issuing of this report in the form and context in which it is to be
      included in the Target’s Statement to be sent to shareholders of Coopers. Neither the whole nor
      any part of this report nor any reference thereto may be included in any other document without
      the prior written consent of Grant Samuel as to the form and context in which it appears.

7.6   Other

      The accompanying letter dated 11 November 2005 and the Appendices form part of this report.

      Grant Samuel has prepared a Financial Services Guide as required by the Corporations Act. The
      Financial Services Guide is set out at the beginning of this report.


      GRANT SAMUEL & ASSOCIATES PTY LIMITED
      11 November 2005




                                                                                                   Page 37
                                                                Appendix 1

                              Market Evidence from Sharemarket Trading Prices
The valuation of Coopers has been considered in the context of the sharemarket ratings of listed Australian and
international companies with activities primarily in the brewing industry. While none of these companies is
precisely comparable to Coopers, and many are considerably larger than Coopers, the sharemarket data provides
some framework to assess the valuation of Coopers.

The multiples for selected Australian and internationally listed brewing companies are set out below:

                           Sharemarket Ratings of Selected Comparable Brewing Companies1
                                                  Market                 EBITDA Multiple2                    EBITA Multiple3
                                               Capitalisation
                                              (local currency                 Forecast   Forecast                Forecast    Forecast
                                                  million)       Historical    Year 1     Year 2    Historical    Year 1      Year 2
    Australia
    Foster’s Group Limited                      A$11,482          15.3        12.0       10.6        17.6        13.7         11.9
    Lion Nathan Limited                          A$4,108          10.1         9.7        9.3        11.9        11.4         11.0
    Average – simple                                              12.7        10.8       10.0        14.8        12.6         11.4
               – weighted                                         13.9        11.4       10.3        16.1        13.1         11.6

    Asia
    Kirin Brewery Company Ltd                 ¥1,237,527           7.7         7.8        7.5        12.5        13.3         12.5
    Asahi Breweries Ltd                        ¥704,347            6.8         6.8        6.6         7.1        10.3          9.9
    San Miguel Corporation                   PHP234,384            9.4         8.9        8.1        15.3        13.2         11.6
    Sapporo Holdings Limited                   ¥204,447           12.2        12.9       12.2        38.1        36.5         33.8
    Tsingtao Brewery Company Ltd              RMB9,969             9.7         8.5        7.6        19.3        15.9         13.9
    Average – simple                                               9.1         9.0        8.4        18.4        17.8         16.3
              – weighted                                           8.2         8.1        7.7        13.8        14.4         13.3
    United States
    Anheuser-Busch Companies, Inc.            US$32,660            9.5        10.4          9.9      12.1        13.7         13.2
    Molson Coors Brewing Company               US$5,440           12.7         7.5          6.8      22.0        12.5         10.9
    Boston Beer Company, Inc                    US$387            12.0        11.0          9.6      14.9        15.5         14.8
    Average – simple                                              11.4         9.6          8.8      16.3        13.9         13.0
              – weighted                                           9.9        10.0          9.5      13.5        13.6         12.9
    South America
    Grupo Modelo SA de CV                   MXN108,023             7.2          6.7         5.8       8.4        13.7         11.9
    FEMSA (Fomento Economico                 MXN85,281             5.5          5.1         4.4       7.8         7.3          6.0
    Mexicano SA de CV
    Grupo Empresarial Bavaria                       COP            8.9          7.9         7.5      10.6        10.1          9.5
                                              12,155,245
    Compania Cervecerias Unidas SA           CLP823,330            9.6          9.2         8.3      16.0        14.2         11.4
    Average – simple                                               7.8          7.2         6.5      10.7        11.3          9.7
             – weighted                                            7.2          6.6         5.9       9.1        10.9          9.5
    United Kingdom
    SABMiller plc                             US$17,509            6.4         6.3        5.0         7.7         7.6          6.1
    Scottish and Newcastle plc                   £4,104           13.2        12.6       12.1        17.8        17.0         16.0
    Average – simple                                               9.8         9.5        8.5        12.7        12.3         11.1
               – weighted                                          8.4         8.1        7.1        10.6        10.4          9.0




1
  The companies selected have a variety of year ends, therefore the data presented for each company is the most recent annual historical
result plus the subsequent two forecast years.
2
    Represents gross capitalisation divided by EBITDA.
3
    Represents gross capitalisation divided by EBITA.


                                                                                                                                 Page 1
                          Sharemarket Ratings of Selected Comparable Brewing Companies1
                                                  Market                 EBITDA Multiple2                        EBITA Multiple3
                                               Capitalisation
                                              (local currency                  Forecast     Forecast                  Forecast      Forecast
                                                  million)       Historical     Year 1       Year 2     Historical     Year 1        Year 2
    Europe
    InBev NV/SA                               EUR18,907           11.0          7.7           6.8         15.7         10.7          9.3
    Heineken NV                               EUR12,895            8.7          7.6           7.1         13.7         12.0         10.9
    Carlsberg A/S                             DKK25,105            9.7          8.4           7.8         19.7         15.1         13.5
    Quilmes Industrial (Quinsa) SA             USD1,097            5.3          n/a           n/a          8.0          n/a          n/a
    Royal Grolsch NV                            EUR372             7.4          7.4           6.8         12.6         13.7         11.9
    Average – simple                                               8.4          7.0           6.5         13.9         12.9         11.4
              – weighted                                           9.8          7.7           7.0         15.1         11.6         10.3
Source: Grant Samuel analysis.4

The multiples above are based on share prices as at 28 October 2005. This is with the exception of SABMiller
plc (“SABMiller”) and Grupo Empresarial Bavaria (“Bavaria”) whose share prices are as at 18 July 2005, the
day prior to the announcement of SABMiller’s takeover of Bavaria. InBev NV/SA’s (“InBev”) share price is
taken on the 15 July 2005 the day prior to the announced takeover of Tinkoff. The multiples do not reflect a
premium for control.

In reviewing these multiples, it is noted that:

        there is considerable variability in the trading multiples of listed brewing companies, with EBITDA
        multiples broadly in the range of 8-10 times across all the major international brewers. Most large
        European and Asian brewers trade in a tighter range of EBITDA multiples of 7-8 times;

        the multiples for the Australian brewers, Foster’s Group Limited (“Foster’s”) and Lion Nathan Limited
        (“Lion Nathan”), are generally higher than for the international brewers. While the two companies enjoy a
        near duopoly position in the Australian beer market, both Foster’s and Lion Nathan generate significant
        earnings from wine assets which are likely to impact the trading multiples;

        Coopers is substantially smaller than the major brewers in Australia. It does not enjoy the benefits of a
        dominant national market position, including the resultant powerful negotiating position with the retailers.
        On the other hand, it does have a strong market position in South Australia and is expected to continue to
        grow in other States; and

        the majority of the comparable companies have significantly larger market capitalisations than Coopers.

A brief description of each company is set out below.

Foster’s Group Limited

Foster’s is Australia’s leading multi-beverage company, with a focus on premium alcoholic beverages. Foster’s
makes and markets Australia’s most famous beer, Foster’s Lager, and brews Australia’s leading beer brands
including Victoria Bitter, Crown Lager, Carlton Draught and Cascade Premium Lager. In addition Foster’s
holds a growing portfolio of spirits, ciders and non-alcoholic beverages. Foster’s has a leading portfolio of
premium wine brands, including the Wolf Blass, Yellowglen, Saltram, Beringer and Meridian brands.

In recent years, Foster’s strategy has involved a focus on its core beer and wine businesses. Accordingly,
Australian Leisure and Hospitality (“ALH”), Foster’s pub division, was spun-off through a public float in
November 2003 and Lensworth Property Group (“Lensworth”), Foster’s property portfolio, was divested in
December 2004.
4
      Grant Samuel analysis is based on data obtained from IRESS, Bloomberg, Annual Reports, company announcements and, in the absence
      of company provided financial forecasts, brokers’ reports. Where company financial forecasts are not available, the median of the
      financial forecasts prepared by a range of brokers has generally been used to derive relevant forecast value parameters. The source, date
      and number of broker reports utilised for each transaction depends on analyst coverage, availability and corporate activity.




                                                                                                                                        Page 2
On 17 January 2005, Foster’s announced a takeover offer of $3.7 billion for Southcorp Limited (“Southcorp”), to
create a leading global wine company. Foster’s successfully acquired 100% of Southcorp pursuant to the
takeover offer and is currently integrating the business.

Net profit after tax in 2005 reached $936.1 million, an increase of 17.1% on the previous year. There was also a
substantial increase in EBITAS5 of 9.5% on the previous year, realising $871.7 million. The brewing division of
Foster’s, Carlton & United Beverages, accounted for close to half of total sales and 65% of total EBITA in 2005.
Carlton & United Beverages occupies a leading market position of 53% in the Australian beer market (based on
volumes).

Lion Nathan Limited

Lion Nathan is an Australian based alcoholic beverages company with operations primarily in Australia and New
Zealand. Its portfolio of beer brands includes Tooheys, XXXX, Hahn, West End, Emu, Swan, James Squire,
Lion, Speights and Steinlager. It brews and distributes around 900 million litres of beer annually. Lion Nathan
also has a global premium wine business formed through the combination of Australian and New Zealand wine
producers Petaluma, Banksia and Wither Hills. In addition to its beer and wine businesses, Lion Nathan is
involved in a number of related businesses in Australia and New Zealand. These include the distribution of
licensed wine and spirits brands, the production and distribution of ready to drink beverages, liquor retailing and
malt extraction for home brewing and the food industry. Kirin Brewery Company Ltd (“Kirin”), a Japanese
brewing company, is a 46% shareholder of Lion Nathan.

In 2005, Lion Nathan reported net profit after tax (before significant items) of $224.8 million, representing a
10.9% increase on the previous year. While the Australian beer business experienced EBITDA growth of 6.3%,
the New Zealand business faced a competitive market resulting in a fall in EBITDA of 14.6%. Lion Nathan
completed a strategic review of the New Zealand operations during the second half of the financial year and
changes are being implemented to strengthen the business and enable profitable growth in the medium to long
term.

Kirin Brewery Company Ltd

Kirin’s core operations include beer, whisky and soft drinks. In addition, Kirin operates diversified business
activities including pharmaceutical and food operations. Market leading brands in the alcoholic beverage
business include Kirin Lager and Chivas Regal. Kirin operates in Japan and throughout Asia and Oceania.

In 2004 net sales reached ¥1,224 billion, a 5% increase on the previous year. The alcoholic beverages business
accounted for half of total net sales in 2004, followed by the soft drinks business which contributed 30% of total
net profits. Kirin forecasts sales of ¥1,650 billion in 2005 with an operating profit estimate of ¥110 billion.

In January 2005 Kirin established a 100% owned holding company, Kirin (China) Investment Co, Ltd, to
manage the development of its alcohol beverage operations in China. The beer market in China has been
growing strongly in the line with China’s strong economy. In November 2004, Kirin purchased a 25% stake in a
Chinese brewing company, Dalian Daxue Brewery.

Kirin’s share price appears to be discounted to some extent due to the non-alcoholic beverage business, and
therefore the resulting multiples are lower by comparison with other market leading brewing companies.

Asahi Breweries Ltd

Asahi Breweries Ltd (“Asahi”) operates three businesses. The core business, alcoholic beverages, manufactures
and sells beer, happoshu (low malt beer), shochu (Japanese spirit), low-alcoholic beverages, spirits and wine.
The soft drinks business manufactures and sells coffee, Japanese tea and soft drinks. The food and
pharmaceutical business sells brewer’s yeast supplements and nutritional supplements.



5
    Earnings before Interest, Taxes, Amortisation and SGARA (Self-generating and Re-generating Assets).


                                                                                                             Page 3
Asahi’s share price and multiples reflect the inclusion of non-alcoholic beverage activities, and tend to be lower
than pure brewers, or alcoholic multi-beverage companies.

Net sales in 2004 totalled ¥1,444 billion with operating income of ¥101 billion. The alcoholic beverages
division accounted for 75% of total next sales and 90% of operating income. While this division only saw a 1%
increase year on year net sales, operating income increased 26% year on year. This is primarily due to a
reduction in manufacturing and logistics costs.

In August 2005 Asahi announced a share buyback of approximately 1.5% of total shares, at around ¥10 billion.
Asahi bought back ¥8.7 billion in stock in 2003 and ¥6.8 billion in 2004.

San Miguel Corporation

San Miguel Corporation (“San Miguel”) is south-east Asia’s largest publicly listed food, beverage and packaging
company. San Miguel is based in the Philippines and Kirin has a 19.67% stake in the company. San Miguel’s
business operations include beverage, food and agriculture and packaging and they have operations both in the
Philippines and internationally.

The largest segment is the beverage division which in 2004 accounted for 60% of total sales and 76% of
operating income. San Miguel reported an 18% rise in sales, reaching PHP174 billion in 2004. Operating
income reached PHP16.7 billion, a 22% increase from the previous year. This rise was due to higher beer
volumes and cost efficiencies in the soft drinks business.

In 2004 San Miguel acquired Berri Limited, Australia’s leading juice manufacturer and a brewery in Thailand.
These acquisitions are included in the 2004 year end results. In January 2005 San Miguel acquired four
packaging companies owned by Malaysia’s Guolene Packaging Industries. San Miguel’s most recent acquisition
in May 2005 has been that of a majority stake in National Foods Limited, Australia’s leading dairy manufacturer.
San Miguel now owns a 76.3% interest.

Sapporo Holdings Limited

Sapporo Holdings Limited (“Sapporo”) is a Japanese holding company consisting of four main operating
companies: alcoholic beverages, soft drinks, restaurants and real estate. The alcoholic beverages division is
engaged mainly in the production and sale of beer, happoshu, wine and spirits in Japan. This division is the core
business of Sapporo and in 2004 accounted for 74% of total group sales.

Net sales in 2004 reached ¥494.9 billion, up from ¥479.5 billion in 2003. There was a significant year on year
decrease in the real estate operations, however this was absorbed by sales increases on higher volumes in the
alcoholic beverages and soft drinks divisions. Operating income in 2004 also increased in 2004 to ¥23.6 billion,
a 77.4% increase on the prior year. This large increase was due to outstanding performance in alcoholic
beverages and positive results in both soft drinks and restaurants which had both recorded losses in 2003.

Tsingtao Brewery Company Ltd

Tsingtao Brewery Company Ltd (“Tsingtao”) was the first beer manufacturer in China. It was also the first
enterprise in Mainland China listed on an overseas stock exchange. The company is engaged in the
manufacturing and sales of beer and other related businesses. Tsingtao is the largest domestic brewer in terms of
production scale and market share, and owns 50 beer plants and 3 malting mills throughout China. The
company’s core product, Tsingtao Beer is one of the most well known Chinese brands in the international
market.

For the financial year ended December 2004, beer sales volumes grew 13.8% to 37.1 million hectolitres. Sales
generated by Tsingtao Beer grew 11% to 11.7 million hectolitres and together with three secondary brands
(Hansi, Oaoshan and Shanshui) generated 56% of the company’s total sales volume. Sales amounted to RMB
7.7 billion in 2004 with operating profit of RMB 561 million, an increase of 7% on the prior year.

Tsingtao is targeting sales volume of beer to reach 41 million hectolitres in 2005, with Tsingtao Beer making up
14 million hectolitres.


                                                                                                            Page 4
Anheuser-Busch Companies, Inc.
Anheuser-Busch Companies, Inc. (“Anheuser-Busch”) produces and distributes beer under brand names
including Budweiser, Michelob, and Busch. It also manufactures beverage cans, recycles aluminium cans for
conversion into new can sheet, manufactures labels, and operates rice milling and barley seed processing plants.
In addition, Anheuser-Busch owns and operates theme parks. Anheuser-Busch operates 14 breweries (12 of
which are located in the United States) and brews approximately 30 different beers for sale in the United States.

In the year to 31 December 2004, Anheuser-Busch generated gross sales (before excise taxes) of US$17.2
billion, and generated net income of US$2.2 billion. Anheuser-Busch sold 103 million barrels of beer in the
United States in 2004 (Bud Light, the No. 1 brand in the United States, grew by 1.5 million barrels). Volumes
sold in the United States (where it has a 49.6% share of the market) accounted for approximately 88% by volume
of its total sales. Anheuser-Busch’s revenue per barrel in the United States grew by 2.5% in the 2004 financial
year, reflecting a favourable domestic pricing environment and consumers trading up to premium beer brands.

In 2004, Anheuser-Busch acquired China’s fourth-largest brewer, Harbin. It now has 10,000 Chinese employees
and an ownership position in 64 breweries in China: 50 through Tsingtao, 13 through Harbin, and a flagship
brewery in Wuhan.

Molson Coors Brewing Company
Molson Coors Brewing Company (“Molson Coors”) was formed by a merger between Adolph Coors Company
and Molson Inc, which was completed on 9 February 2005. It is world’s fifth-largest global brewer, with pro-
forma combined annual volume of 60 million hectolitres and net sales of more than US$6 billion. Molson Coors
has a leading position in Canada (where it has a market share of 42.6%) and in the United Kingdom. Molson
Coors has 15,000 employees worldwide, 18 breweries, and a portfolio of over 40 brands, including Molson
Canadian, Coors Light and Carling.

Molson Coors reported higher consolidated net sales and sales volume for the second quarter of 2005 compared
to the second quarter of 2004, but reported lower net income. This decrease is primarily attributed to special
charges related to the merger.

The company is currently reviewing its underperforming Brazilian operations and is considering a sale of its
20% stake in the Montreal Canadiens hockey club. Molson’s Kaiser and Bavaria brands have seen their sales
and market share decline recently because of distribution and marketing problems. Dan O’Neill, the former
CEO of Molson who helped orchestrate the merger, has recently resigned, ending months of speculation.

Boston Beer Company

Boston Beer Company (“Boston Beer”) is the largest craft brewer and the sixth largest brewer in the United
States. Boston Beer produces malt beverages and hard cider products at company owned breweries and
breweries under contract. The company’s beers are primarily positioned in the premium beer category of the
beer industry and command a higher price, quality and image as compared with regular domestic United States
beers. Samuel Adams is Boston Beer’s premier brand, with a product range of 15 beers. Samuel Adams is
considered to be the third largest brand within the premium beer segment in the United States. In addition to
Samuel Adams, the company also sells alternative malt beverages under the Twisted Tea brand and Cider under
the HardCore brand.

Net revenue increased by 4.5% to US$217.2 million in 2004, with operating income reaching US$19.4 million,
an increase of 22% on the previous year.

Grupo Modelo SA de CV

Founded in 1925, Modelo is the leader in production and marketing of beer in Mexico, holding a 62.5% market
share. With seven brewing plants in Mexico, total brewing capacity is 52 million hectolitres annually. Modelo
currently brews 10 brands, the number one being Corona Extra. Five brands are exported with presence in more
than 150 countries. They are the exclusive importer of Anhuser-Busch’s products in Mexico, including
Budwiser and Bud Light.



                                                                                                           Page 5
Net sales rose 5.3% to 44 billion pesos in 2004. Operating income rose 15% to 13 million pesos in the 2004
financial year. While domestic beer sales in volume rose 1.6% year on year, it was the export market that had
the higher volume growth, 3.5% year on year. The United States continues to record strong growth however the
United Kingdom and China is where sales have really accelerated.

Fomento Economico Mexicano SA de CV

Headquartered in Monterrey, Mexico, FEMSA is the largest integrated beverage company in Mexico and Latin
America, exporting products to the United States, Canada and selected countries in Latin America, Europe and
Asia. FEMSA operates through the following subsidiaries: FEMSA Cerveza, Coca-Cola FEMSA, FEMSA
Comercio and two strategic business units, FEMSA Empaques and FEMSA Logistica.

FEMSA Cerveza produces and distributes brands of beer. In 2004, FEMSA Cerveza’s revenues increased 3% to
24 billion pesos and accounted for 26.5% of total company sales. Operating margins for this division were
21.2%.

Coca-Cola FEMSA is a bottler for The Coca-Cola Company in Latin America and the second biggest bottler for
The Coca-Cola Company worldwide. FEMSA owns 45.7% of Coca-Cola FEMSA, The Coca-Cola Company
owns a 39.6% interest and the remainder is listed on the Mexican and New York Stock Exchange. Coca-Cola
FEMSA generated a 22% increase in sales from 2003 to 2004 with sales reaching 46 billion pesos. These sales
account for half of total company sales. Coca-Cola FEMSA produced an operating margin of 16.6% in 2004.

FEMSA Comercio operates the OXXO convenience store chain, the largest in Latin America. FEMSA
Comercio had sales of 22 million pesos in 2004, an increase of 25% from the previous year. The operating
margin for this business is low, yielding 4.5% in 2004.

FEMSA Empaques supports the group’s beverage operations by producing cans, bottles, caps and labels.
FEMSA Logistica provides logistic and management services to FEMSA subsidiaries and external customers.

Total revenue in 2004 reached 93 million pesos, an increase of 17.2%. Operating margins also increased 8.7%
to 13 million pesos. FEMSA’s low earnings multiples reflect the composition of its businesses, and particularly
the low margins of the convenience store operations.

Grupo Empresarial Bavaria

Bavaria is the second largest brewer in South America. The company also produces and markets malt beverages,
fruit beverages, soft drinks, bottled water and milk. Of a total of 34.3 million hectolitres sold in 2004, 28.6
million hectolitres were beer and malt beverages. Bavaria’s shares are listed on the Colombian Stock Exchange.

In 2004, net sales reached US$1.9 billion, a rise of 13% on the previous year. Of these total sales, Colombia
accounted for 57.3%, Peru 27.3% and the remainder spread between Ecuador and Panama. Operating profit also
increased in 2004 to US$615 million, an increase of 25% from 2003. Due to an increase in non-operating
foreign exchange losses caused by the revaluation of the Colombian peso, Bavaria recorded a net loss of
US$31.2 million in 2004.

In July 2005, SABMiller announced the acquisition of Bavaria for US$7.8 billion. Bavaria will give SABMiller
access to Latin America’s second biggest beer maker and help SABMiller compete with InBev in that region.
InBev bought AmBev, the dominant Latin American beer maker in March 2004.

Compania Cervecerias Unidas SA

Compania Cervecerias Unidas SA (“CCU”) is a diversified beverage company operating principally in Chile and
Argentina. CCU’s four principal business units are: beer in Chile; beer in Argentina; soft drinks, nectars and
mineral water; and wines. The company has licensing and/or joint venture arrangements with a number of
companies including Anheuser-Busch Incorporated, Heineken Brouwerijen B.V., PepsiCo Inc., Schweppes
Holdings Limited and Guinness Brewing Worldwide Limited.

In 2004, CCU achieved historical records in all of its major financial indicators: sales volumes rose 4% to 11.3
million hectolitres; revenues increased 6.9% to CLP 420 billion; and operating profits rose 25% to CLP 58

                                                                                                          Page 6
million. By segment, beer in Chile accounted for 39% of total revenue and 77% of CCU’s operating income.
The soft drinks, nectars and mineral water division sales represented 29% of total sales and 14% of operating
income. Although beer in Argentina accounted for 10% of total revenues the impact on total operating income
was marginally negative. This was due to the country’s poor economic standing. The wine division accounted
for 19% of total 2004 revenues and 8% of operating income.

SABMiller plc

SABMiller is one of the world’s largest brewers. It has a brewing presence in over 40 countries and a portfolio
of over 150 brands (including its international brands Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine
Draft and Castle Lager). SABMiller also owns hotels throughout Africa, and bottles and distributes a number of
soft drinks, including Coca-Cola and Schweppes.

The 12 months to 31 March 2005 saw sales increase 15% to £7.7 billion. EBITA for the 2005 financial year was
£1.3 billion, with EBITA margins increasing from 15.0% to 16.6% year on year. The star performer over this
period was the South African division. Strong currency and an increase in consumer spending were the main
drivers for the 36% increase in EBITA in this division.

In July 2002 South African Breweries plc (“SAB”) acquired Miller Brewing Company (“Miller”), North
American beer operations, and changed their name to SABMiller. Miller’s beer volumes were negatively
affected by low US consumer confidence, a lacklustre economy and poor weather. In May 2003 SABMiller
announced a three year recovery program for Miller. The key elements of the turnaround strategy were: brand
building, sales and distribution, costs and productivity, and organisational capability. SABMiller’s trading
multiple continues to be held back by the Miller operations, however improvements in the financials of the North
American operations were evident in SABMiller’s 2005 financial year.

In July 2005, SABMiller announced the acquisition of Bavaria for £4.5 billion. Bavaria will give SABMiller
access to Latin America’s second biggest beer maker and help SABMiller compete with InBev in that region.
InBev bought AmBev, the dominant Latin American beer maker in March 2004.

Scottish & Newcastle plc

Scottish & Newcastle plc (“Scottish & Newcastle”) brews beer, and operates pubs, pub restaurants and lodges.
Scottish & Newcastle has a leading position in 14 countries in Europe and Asia: the United Kingdom, France,
Belgium, Portugal, Finland, Greece, Russia, Estonia, Latvia, Lithuania, Ukraine, Kazakhstan, India and China.
It has three of the top ten European beer brands: Baltika, Kronenbourg and Foster’s (under licence). Its key
businesses are organised along geographic lines: the United Kingdom (Scottish Courage and Scottish &
Newcastle Pub Enterprises), France (Brasseries Kronenbourg), Greater Europe and the United States (Alken-
Maes, Sociedade Central de Cervejas, Hartwall, S&N Importers, BBH joint venture) and Asian Development
markets (Millennium Alcobev in India and Chongqing Breweries in China).

In the 2004 financial year, Scottish & Newcastle generated organic growth in beer volumes of 5%, and growth in
revenue of 3% to £5 billion. In the key United Kingdom market, volume sales of its top four brands (Foster’s,
John Smith’s, Kronenbourg 1664 and Strongbow) increased by 4.5%. These take home beers are priced at a
premium to their rival brand in each segment. In December 2004, Scottish & Newcastle acquired the rights to
manage an additional 364 pubs in the United Kingdom. This increased the number of leased pubs being run by
Scottish & Newcastle to around 1,500.

Scottish & Newcastle’s focus has been on reducing its cost base while increasing marketing expenditure and
generating strong cash flow, enabling it to reduce its debt burden. In the 2004 financial year, it increased its
gross margin across the business by 70 basis points and its operating margin by 50 basis points despite a
significant increase in marketing expenditure.

InBev NV/SA
InBev was formed in 2004 when Interbrew and Compania de Bebidas das Americas (“AmBev”) combined.
InBev is the leading brewer in the world by volume, selling 205 million hectolitres of beer and 30 million
hectolitres of soft drinks annually. It employs 77,000 people and has production plants in 32 countries across
Europe, North America, and Asia.


                                                                                                          Page 7
InBev has a portfolio of more than 200 brands and brand extensions, including its three global flagship brands
Stella Artois, Brahma and Beck’s. Stella Artois is the fifth-largest international beer in the world and is
distributed in over 80 countries. Beck’s is the tenth-largest international brand and distributed in approximately
120 countries. Brahma is the latest addition to the global flagship brand group and is the eighth-largest beer
brand in the world.

InBev is ranked No. 1 or No. 2 in over 20 beer markets around the world. InBev’s strategy is to strengthen its
positions in the world’s major beer markets through organic growth, world-class efficiency, targeted
acquisitions, and by focusing on consumers.

In 2004, InBev had a net turnover of €8.6 billion and generated EBITA of €2.3 billion (representing organic
growth of 9%). In Europe, growth was strongest in Eastern European markets where volumes grew 12%. In the
key United Kingdom market, InBev saw a 3% decline in sales of Stella Artois by volume as it focused on
premium positioning at the expense of volume growth. In the United States, InBev grew volumes by 3% and
EBITDA by 17%, reflecting cost reductions and an improved sales mix (resulting in a margin improvement of
230 basis points).

In July 2005 InBev announced the acquisition of Tinkoff, the Russian based brewer, for €167 million. Tinkoff is
the market leader in the Russian super-premium beer segment.

Heineken NV
Heineken NV (“Heineken”) is an international brewer and also produces beverages through affiliated breweries
and license-holders. Heineken’s international brands are Heineken, Amstel, Buckler, and Murphy’s Irish Stout.
Heineken operates in over 170 countries, through its own breweries and through export and licensing partners.
Europe accounts for over half of Heineken’s sales volume. At the end of 2003, Heineken owned over 115
breweries in more than 65 countries and employed over 60,000 people.

Heineken Holding NV holds 50.005% of the Heineken shares. Heineken Holding NV has no operational
activities: these are carried on by Heineken and its related companies. Heineken is responsible for the
development and implementation of the group’s strategy. Heineken Holding NV is concerned primarily with
safeguarding the long-term continuity, independence and stability of Heineken’s activities. The net asset value
and dividend policy of the two companies are identical. The shares and options on the shares of both companies
are traded on Euronext Amsterdam.

In the 2004 financial year, Heineken achieved organic operating profit gains of 5%, attributable in part to cost
reductions. It had sales volumes of 113 billion hectolitres, an increase of 13.8% on the previous year. Heineken
generated revenue of €10.0 billion and EBITDA of €2.0 billion in 2004. Its premium brand, Heineken, had
global sales of 19.2 million hectolitres and increased its market share in the United States and Europe. Heineken
expects further organic growth in net profit in 2005, but has indicted that, due to an increase in forecast
marketing and innovation spend, this organic growth will not exceed mid-single digits.

Carlsberg A/S
Carlsberg A/S (“Carlsberg”) is an international brewing company which, through its subsidiary Carlsberg
Breweries A/S, produces Carlsberg and Tuborg beers and regional brands such as Okocim in Poland, Pripps in
Sweden, Ringnes in Norway, Koff in Finland, Tetley’s in the United Kingdom and Feldschlösschen in
Switzerland. The company also markets and produces soft drinks, water and wine. The Western European
market accounts for over 70% of Carlsberg’s sales.

In the 2004 financial year, Carlsberg sold 92 million hectolitres of beer and 19 million hectolitres of soft drinks.
These volumes generated DKK 35.9 billion of revenue and DKK 3.4 billion of EBITA. Net revenue increased
4% from the previous year with acquisitions accounting for 6% of this growth and organic growth making a -2%
contribution.

Carlsberg has indicated that it expects net sales of approximately DKK 38 billion in 2005 and EBIT of DKK 3.4
billion.




                                                                                                              Page 8
Quilmes Industrial (Quinsa) SA

Quilmes Industrial (Quinsa) SA (“Quinsa”) is a Luxembourg based holding company that controls 87.6% of
Quilmes International (Bermuda) Ltd (“Quilmes”). Quinsa, through Quilmes, controls beverage and malting
businesses in five Latin American countries. Its beer brands are market leaders in Argentina, Bolivia, Paraguay,
Uruguay and Chile. The company also has distribution agreements with AmBev to sell the Ambev brands in
Latin America. They also have bottling and franchise agreements with PepsiCo in Uruguay and Argentina.

Strong beer volumes in 2004 (an increase of 7.8% on the previous year) contributed to a 22% increase in sales to
US$765 million. In addition, higher pricing, particularly in Argentina, and cost savings from improvements in
industrial efficiency, resulted in a 43% increase in EBITDA to US$301 million.

Quinsa announced in August 2005 it has agreed to acquire Beverage Associates Corporation’s 5.32% interest in
Quilmes for US$110 million. Once the transaction is completed, Quinsa will own 93% of Quilmes. This
transaction is not reflected in the multiples.

Royal Grolsch NV

Royal Grolsch NV (“Grolsch”) has its origins in the east of the Netherlands and has breweries in Enschede and
Groenlo. From 2005, the activities of the two breweries will be concentrated in a single new brewery at
Boekelo, in the Enschede municipality. The phased commissioning of the new brewery in the 2004 and 2005
period also means that the expected efficiency improvement will be achieved gradually from 2004. Outside the
Netherlands, Grolsch beer is brewed under licence in the United Kingdom and in Poland. Grolsch beer is
distinguishable by its unique swingtop bottle.

Grolsch has recently appointed a new CEO who has emphasized an increased focus on volume growth and
market share and an intention to increase advertising and promotional expenditure. Grolsch’s revenue for the
year ended 31 December 2004 was €314.7 million, a 4% increase over the previous year, however EBITDA
declined from €61.0 to €60.5 million due primarily to lower prices and increases in raw material and
consumables costs. Net profit after tax declined 28% reflecting a higher depreciation charge following
commissioning of a new brewery in 2004.

Grolsch anticipates continuing volume growth outside the Netherlands, primarily in its key markets: the United
Kingdom, the United States, Canada and France. Partly because of the further efficiency improvements to be
achieved with the new brewery, Grolsch expects renewed profit growth in 2005.




                                                                                                          Page 9
                                                                      Appendix 2

                                                Market Evidence from Transactions
    In recent years there have been few transactions involving brewing companies in Australia. However, there have
    been a number of transactions in the international brewing industry in recent years as the sector has undergone a
    consolidation phase. Many transactions that have taken place have had undisclosed prices or undisclosed
    earnings or are more useful as valuation references for other reasons. Summarised below are the EBITDA and
    EBITA multiples implied by selected transactions on which relevant information is available. Although the
    transactions identified primarily involve international companies, the majority of which are significantly larger
    than Coopers, they provide evidence of prices that acquirers are willing to pay and provide some support for the
    multiples implied by the valuation of Cooper’s brewing business:

                                                          Selected Transaction Evidence
                                                                                                           EBITDA                               EBITA
                                                                            Consideration1
                                                                                                           Multiple2                            Multiple3
        Date        Target                 Transaction                      (local currency
                                                                                millions)                   Forecast   Forecast                  Forecast    Forecast
                                                                                              Historical                           Historical
                                                                                                             Year 1     Year 2                    Year 1      Year 2

        Australia
        Apr 00      J Boag & Sons Ltd      Acquisition by San Miguel               A$97           18.2         n/a        n/a          28.8         n/a         n/a
                                           Corporation
        Apr 98      Lion Nathan Limited    Acquisition of a 45% interest    NZD $4,287            10.6           9.7        9.0        12.9         11.9        11.2
                                           by Kirin Brewery Company
                                           Limited
        South America
        Jul 05     Grupo Empresarial       Acquisition by SABMiller plc           COP                8.4         7.5        7.1        10.0           9.6         9.0
                   Bavaria                                                  16,678,455
        Mar 04     Companhia de Bebidas    Acquisition by Interbrew SA      Real 63,288           14.5         11.1       n/a          n/a          n/a         n/a
                   das Americas
        North America
        Jul 04     Molson Inc              Acquisition by Adolph Coors      CAD$6,228             11.6         10.0         9.2     13.1            11.2        10.2
                                           Company
        May 02      Miller Brewing         Divestment by Phillip Morris       US$5,622               9.2         9.0        8.5        11.8         11.1        10.5
                    Company                to SABMiller
        United Kingdom
        Dec 01     Carling Brewers         Divestment by Interbrew SA to      US$1,700               8.5         8.5         8.1       n/a          15.8        14.5
                                           Adolph Coors Company
        Jun 00      Bass Brewers           Acquisition by Interbrew SA           £2,300              9.5         7.7      n/a          14.5         13.5        n/a
        Europe
        Feb 05      Birra Peroni Spa       Acquisition of 40% interest by           €563          12.6         11.8       10.0         20.3         18.3        14.4
                                           SABMiller plc following a
                                           60% acquisition in May 2003
        Feb 04      Carlsberg Breweries    Acquisition by Carlsberg A/S     DKK 37,250               8.6       n/a        n/a          15.2         n/a         n/a
                    A/S                    of Orkla’s ASA 40% stake
        Jan 04      Holsten Brauerei AG    Acquisition by Carlsberg A/S          €1,086              8.7       n/a        n/a          32.8         n/a         n/a
        Sep 03      Gabriel Sedlmayr       Acquisition by Interbrew SA              €477             8.8         8.9      n/a          n/a          n/a         n/a
                    Spaten-Franziskaner
                    Bräu KGaA
        May 03      BBAG Österreichische   Acquisition by Heineken NV            €1,742              9.8         8.6         7.8       22.6         21.6        17.9
                    Brau-Beteiligungs-
                    Aktiengesellschaft
        Nov 02      Gilde Brauerei AG      Acquisition by Interbrew SA              €475            8.6        n/a        n/a          n/a          n/a        n/a
        Feb 02      Hartwall OY AB         Acquisition by Scottish &             €2,259           10.0         n/a          8.3        13.6         n/a       11.2
                                           Newcastle plc
        Aug 01      Brauerei Becks & Co    Acquisition by Interbrew SA         €1,829             n/a          11.8       n/a          n/a          17.3        n/a
        Minimum                                                                                      8.4         7.5         7.1       10.0            9.6        9.0
        Median                                                                                       9.5         9.0         8.4       14.5          13.5       11.2
        Maximum                                                                                    18.2        11.8        10.0        32.8          21.6       17.9
    Source: Grant Samuel analysis.4

    1
           Implied equity value if 100% of the company or business had been acquired.
    2
           Represents gross consideration divided by EBITDA.
    3
           Represents gross consideration divided by EBITA
4
           Grant Samuel analysis is based on data obtained from IRESS, Bloomberg, Annual Reports, company announcements, transaction
           documentation and, in the absence of company provided financial forecasts, brokers’ reports. Where company financial forecasts are not
           available, the median of the financial forecasts prepared by a range of brokers has generally been used to derive relevant forecast value
    (footnote continued)
                                                                                                                                                              Page 1
The transactions have taken place at prices that imply multiples in a relatively wide range. In reviewing these
multiples it is worth noting that:

     San Miguel Corporation’s (“San Miguel’s”) acquisition of Australian based J Boag & Sons Ltd (“Boags”)
     illustrates the higher multiples paid for a successful premium beer brand, in a growing premium market. It
     must be recognised however, that at the time of the acquisition, Boags was the second largest selling
     premium beer brand nationally, behind Foster’s Group Limited’s “Crown”; and

     there is no direct relationship between multiples paid and geographical split. The acquisition multiples tend
     to reflect the market position of the target and the expected transaction synergies.

San Miguel Corporation/J Boag & Sons Ltd

San Miguel, the Manila based company which makes four out of every five beer bottles consumed in the
Philippines, announced on the 18 April 2000 their intention to acquire Boags for a cash offer of A$1.65. This
represented a 48% premium to Boags prior day closing price. San Miguel had already bought 14.9% of Boags
from two key investors.

Boags ‘James Boag Premium Lager’ was Australia’s number two ranked premium bottled beer behind Foster’s
‘Crown Lager’. The acquisition gave San Miguel its first brewing presence in Australia and access to
Australia’s growing premium beer segment. San Miguel would also use their existing Asian distribution system
to market the Boags brand outside Australia.

Kirin Brewing Company Limited/Lion Nathan Limited

In April 1998, Kirin Brewing Company Limited (“Kirin”) acquired a 45% interest in New Zealand brewer Lion
Nathan Limited (“Lion Nathan”) at a price of $5.40 per share, for a total consideration of approximately NZ$1.3
billion. Kirin’s is Japan’s largest beer maker and the Lion Nathan acquisition will add brands like Castlemaine
XXXX and Steinlager to Kirin’s own portfolio. The purchase made Kirin the fourth largest brewer in the world.

SABMiller plc/ Grupo Empresarial Bavaria

SABMiller plc (“SABMiller”) announced on the 19 July 2005 that it plans to acquire a majority stake in Grupo
Empresarial Bavaria (“Bavaria”). The deal involves a transaction with the Santo Domingo Group (“SGC”)
whereby BEVCO LLC (“BC”), the holding company of SDG’s interest in Bavaria, will merge with a wholly
owned subsidiary of SABMiller. SABMiller will obtain BC’s indirect 71.8% interest in Bavaria and in return
will issue 225 million SABMiller ordinary shares for a value of approximately $3.5 billion.

Following this transaction SABMiller will make a cash offer to acquire all the minority shares of Bavaria in
Columbia at a price per Bavaria share of $19.48. Assuming 100% acceptance of this offer, the cash requirement
is estimated at $1.4 billion. In addition SABMiller will acquire the outstanding minority interest in Cerveceria
Leona SA, a subsidiary in Columbia, for $176 million in cash. SABMiller will also make a cash offer to acquire
the listed voting “A” shares in Bavaria’s subsidiary in Peru, UCP Backus y Johnston SAA (‘B&J’) representing
the remaining 24% of the voting interest of B&J and the minority interests of its listed subsidiaries in Ecuador.
Assuming 100% acceptance for the Peru and Ecuador offers, the total cash requirement is approximately $555
million.

The implied value of 100% of the equity in Bavaria is approximately $4.8 billion. Adding net debt of
approximately $1.9 billion and minority interests of $1 billion, total implied enterprise for the full economic
interest in Bavaria and all its subsidiaries and associates is $7.8 billion.




   parameters. The source, date and number of broker reports utilised for each transaction depends on analyst coverage, availability and
   corporate activity.




                                                                                                                                 Page 2
Interbrew SA/Companhia de Bebidas das Americas

Belgium’s Interbrew SA and Brazil’s Companhia de Bebidas das Americas (“AmBev”) announced on 3 March
2004 a transaction that combines Interbrew and AmBev, creating InBev NV SA (“InBev”). The transaction
consists of a number of stages.

InBev issued 141.7 million new shares for 100% of Tinsel Investments SA., which indirectly holds
approximately 22.5% economic interest and 52.8% voting interest in AmBev. Tinsel Investments holds the
AmBev shares through two subsidiaries, Braco and ECAP.

AmBev then issued 7.9 billion new AmBev common shares and 11.4 billion preferred shares to InBev and
assumed debt of $1.3 billion in exchange for InBev’s wholly owned Canadian subsidiary Labatt, including its
30% interest in Femsa Cerveza SA de CV and its 70% interest in Labatt USA.

InBev then made a follow on offer for the remainder of AmBev that it did not already own (other than those
shares owned by Fundacao Antonio e Helena Serener). The net effect of the transaction was that Interbrew
acquired 55.6% of the economic interest and 83.9% of the total voting interest in AmBev.

The transaction created the world’s largest brewing company by volume with 14% of the global beer market and
a presence in 140 countries. Its brands include Becks, Stella Artois and Brahma. The transaction was expected
to generate substantial synergies of around €280 million through a combination of technical, procurement and
other general and administrative cost savings, as well as commercial synergies such as the cross-licensing of
existing brands.

Adolph Coors Company/Molson Inc

Canadian based Molson Inc. (“Molson”) and Adolph Coors Company (“Coors”) (the third biggest brewery in the
United States) announced on 22 July 2004 an intention to combine Molson and Coors. The merger created the
world’s fifth largest brewery. The transaction was structured as a Plan of Arrangement under which each share
of Molson held by a Canadian resident was exchanged, at the election of the holder, for exchangeable shares in a
Canadian subsidiary of Molson Coors and/or Molson Coors stock. Molson shares held by non-residents of
Canada were exchanged for Molson Coors stock.

Under the Plan of Arrangement, each Molson Class B common share was converted into shares which were
exchanged for 0.126 voting share and 0.234 non-voting share of Molson Coors (or exchangeable shares, as
applicable) and each Molson Class A non-voting share has been converted into shares which were exchanged for
0.360 non-voting share of Molson Coors (or exchangeable shares, as applicable). A total of 2,437,513 Class A
exchangeable shares and 32,161,792 Class B exchangeable shares of Molson Coors Canada and 64,275 shares of
Class A common stock and 12,084,689 shares of Class B common stock of Molson Coors Brewing Company
were issued as part of the merger transaction to former Molson shareholders. In addition, Molson shareholders
on record at close of business on 8 February 2005 were eligible to receive a CDN $5.44 special dividend as part
of the transaction.

South African Breweries plc/Miller Brewing Company

On 30 May 2002, South African Breweries plc (“SAB”) announced that it had entered into an agreement with
Philip Morris Companies Inc. to acquire 100 per cent of Miller Brewing Company (“Miller”). Miller was the
world’s sixth largest brewer, providing SAB with new market positions in North and Central America. The
transaction created the world’s second largest brewer. In consideration, SAB agreed to issue to Philip Morris
430 million shares. The pre-market speculation implied enterprise value of Miller was US$4,993 million,
including net debt of US$2,000 million.

The shares issued to Philip Morris comprised two classes of equity capital: ordinary shares and unlisted
participating shares. The total of these shares was equivalent to an economic interest of 36.02% in the enlarged
SABMiller plc. Philip Morris’ total voting rights were capped at 24.99% of the votes exercisable at a general
meeting.




                                                                                                          Page 3
Adolph Coors Company/Carling Brewers

Coors announced on 24 December 2001 that it had agreed to purchase the United Kingdom based Carling
Brewers (comprising the majority of the assets that made up the Bass Brewers business, including the United
Kingdom’s top selling beer Carling, together with Worthington, Stores and Caffrey’s brands) from Belgium’s
Interbrew for US$1.7bn (£1.2bn). The deal allowed Interbrew to satisfy regulators concerned over the brewers’
hold on the United Kingdom beer market after the regulator rejected Interbrew’s £2.3 billion (US$3.5 billion)
purchase of Bass Brewers. The transaction provided Coors (the third largest brewer in the United States) with an
18% share of the United Kingdom beer market.

Interbrew SA/Bass Brewers

On 14 June 2000, Interbrew announced that it had reached agreement with Bass PLC to purchase its brewing
activities (“Bass Brewers”) for £2.3 billion. Bass Brewers and the former Whitbread Beer Company had a
combined United Kingdom market share of 32%. Bass’ pub estate did not form part of the acquisition.

Bass Brewers was the second largest brewer in the United Kingdom, with a turnover of £1.8 billion and
operating profit of £159 million in the year to 30 September 1999. It owned six breweries in the United
Kingdom and three in the Czech Republic. Bass Brewers owned a brand portfolio which included leading
brands such as Bass, Carling, Tennent’s, Worthington and Caffrey’s.

The United Kingdom Government ruled in January 2001 that Interbrew would have to sell Bass Brewers due to
concerns about competition. The High Court subsequently overturned the Government’s ruling. However,
Interbrew undertook to divest Carling Brewers, which enabled the company to retain Bass Brewers business in
Scotland and Ireland as well as the global rights to the brands Bass Ale and Tennent’s. This represented a 4.5%
share of the UK beer market and when added to Interbrew’s existing UK operations, takes the UK market share
of beer up to 15.8%.

SABMiller/Birra Peroni Spa

On 23 February 2005 SABMiller announced its intention to acquire a further 39.8% stake in Birra Peroni Spa
(“Birra Peroni”) for €162.5 million. The agreement follows SABMiller’s 60% acquisition of Birra Peroni in
May 2003. SABMiller acquired the 60% stake for €246 million and entered into put and call arrangements with
shareholders who did not sell their stake initially which, when fully exercised, would result in SABMiller
increasing its shareholding in Birra Peroni to 99.8% from December 2006. The price payable under the put and
call arrangements was based on an equity value of €410 million (for 100% of Birra Peroni) plus interest and earn
out arrangements which were dependant on the future performance of the business. The earn out arrangements
were terminated pursuant to the February 2005 agreement. SABMiller’s initial cash investment of €246 million
($279 million) was based on a total enterprise value of €563 million ($638 million).

Birra Peroni is the second largest brewer in Italy with an approximate 25% market share and four operating
breweries in Bari, Naples, Rome and Padova. Their portfolios of brands include the number one mainstream
beer in Italy and the number three brand in the premium segment.

Carlsberg A/S/Carlsberg Breweries A/S

On 19 February 2004, the Danish company, Carlsberg A/S (“Carlsberg”), announced that it had signed an
agreement to buy the Norwegian company, Orkla ASA (“Orkla”), 40% shareholding in Carlsberg Breweries A/S
(“Carlsberg Breweries”) for a total consideration of approximately DKK14.8 billion. The transaction ended the
partnership between Carlsberg and Orkla and installed Carlsberg as the sole shareholder of Carlsberg Breweries.
At completion, Carlsberg made a cash payment to Orkla of DKK11.0 billion, together with an additional
payment of DKK80 million to cover Orkla’s expenses associated with the transaction. In addition, Carlsberg
agreed to pay DKK3.8 billion plus accrued interest two years from completion.

Carlsberg A/S/Holsten Brauerei AG

On 20 January 2004, Carlsberg announced that it had agreed to acquire the main part of the Northern German
brewer Holsten Brauerei AG (“Holsten”) brewing business for an enterprise value of €437 million. The
transaction was effected through a bid by Carlsberg for the entire issued share capital of Holsten at €38 per share

                                                                                                             Page 4
(a total enterprise value of €1,065 million), with agreements to on-sell the Konig and Licher breweries to the
Bitburgwer Group and the water business to an undisclosed third party. Carlsberg entered a conditional
agreement to acquire 51% of Holsten from the Eisenbeiss family and other parties. Carlsberg expected to
generate synergies of €7 million in 2004 and €14 million in the following year through distribution of its brands
through the Holsten distribution network. It also planned to move its production facilities into Holsten
breweries.

The multiples shown reflect only the brewing assets retained by Carlsberg, for which earnings were separately
disclosed.

Interbrew SA/ Gabriel Sedlmayr Spaten-Franziskaner Bräu KGaA

On 18 September 2003, Belgium based Interbrew announced a strategic partnership with Gabriel Sedlmayr
Spaten-Franziskaner Bräu KGaA (“Spaten”), to combine Spaten’s beer business with Interbrew. The transaction
was executed in three steps. First, Spaten agreed to separate the Spaten-Franziskaner brewing activities into a
separate legal entity. Next, these activities, plus Löwenbräu brewing, were transferred to Interbrew Deutschland
in exchange for a 13% share in the enlarged equity of Interbrew Deutschland. Finally, Brauerei Beck & Co
acquired the Dinkelacker-Schwaben Bräu business. The transaction created the largest brewing company in
Germany with a production volume of 15.6 hectolitres and an 11% share of the German beer market.

The transaction valued the combined Spaten and Dinkelacker beer interests at an enterprise value of €477
million (equity value €522 million and €45 million net cash). Based on 2004 performance thresholds for Spaten,
an additional future payment of up to €56 million could be triggered, leading to an enterprise value of up to €533
million, assuming the performance targets were fully met.

Heineken NV/BBAG Österreichische Brau-Beteiligungs-Aktiengesellschaft

On 2 May 2003, Heineken NV (“Heineken”) announced it had reached agreement with representatives of the
shareholders of Getränke-Beteiligungs-AG (“GeBAG”) to acquire a majority stake in BBAG Österreichische
Brau-Beteiligungs-Aktiengesellschaft (“BBAG”), the leading Austrian brewery group. With a total volume of
26 million hectolitres, the transaction enabled Heineken to become the regional market leader with a market
share of 27%. Heineken expected to generate significant synergy gains in addition to cost reduction programs
initiated by BBAG. BBAG’s strong market position in a number of countries in which Heineken did not have a
significant presence would also support faster volume growth by the international Heineken premium brand.
The EBITA multiples implied by the transaction value are significantly higher than the implied EBITDA
multiples due to the large amount of depreciation resulting from substantial prior acquisitions undertaken by
BBAG.

Heineken agreed to acquire up to 100%, but not less than 75%, of the shares in GeBAG, which itself held 68.7%
of BBAG’s share capital. GeBAG’s shareholders were offered a total consideration of €769 million for 100% of
GeBAG. Upon completion of the transaction Heineken had acquired 78.8% of GeBAG.

Heineken also agreed to launch a public offer for the outstanding shares of BBAG and its sub-holding Brau
Union AG (“BU”) at prices of €124.00 per BBAG share and €127.27 per BU share.

Interbrew/Gilde Brauerei AG

On 15 November 2002, Interbrew announced that the Management Board and Supervisory Board of Brauergilde
Hannover AG had agreed to support the offer of Interbrew Deutschland Holding for up to 100% of the issued
shares of Brauergilde Hannover AG, which owned 85.4% of Gilde Brauerei AG (“Gilde”). Gilde had a 3.7%
share of the German market with a unique position in the city of Hannover with its Gilde brand and its premium
Hasseröder was among the leading brands in the north eastern part of Germany.

The value of 100% of the shares of Brauergilde Hannover AG was €523 million based on the offer price. Taking
into account the value of treasury shares of €32 million, Interbrew agreed to pay the public shareholders a total
consideration of €491 million, should all shareholders decide to accept the offer.




                                                                                                            Page 5
Interbrew agreed to then make a mandatory offer for the remaining 15% of the outstanding shares of Gilde. The
total equity value of both transactions was at approximately €575 million. The equivalent enterprise value after
adjustments for cash and non-operational real estate investments was €475 million.

Scottish & Newcastle plc/Hartwall OY AB

On 14 February 2002, Scottish & Newcastle plc announced the acquisition of Hartwall OY AB (“Hartwall”)
through a recommended share offer. The offer valued the Hartwall business at €2.0 billion (£1.2 billion).
Hartwall was Finland’s leading beer and soft drink company with a 45% market share in the Finish beer market.
It also owned a 50% stake in Baltic Beverages Holding AB (“BBH”), a joint venture with Carlsberg. BBH had a
market share of 30% in Russia, 49% in Estonia, 45% in Latvia and 45% in Lithuania, in each case being the
market leader. It was also the third largest brewer in Ukraine with an 18% market share.

Interbrew/Brauerei Becks & Co

On 6 August 2001, Interbrew announced that it had reached agreement with the shareholders of Brauerei Becks
& Co (“Becks”) to acquire all the outstanding shares of Becks, Germany’s fourth largest brewer. Consideration
was not disclosed but was estimated by market observers at €1.8 billion. Becks was a unique premium brand
which was well positioned in Germany and internationally and therefore offered significant volume and value
growth potential.




                                                                                                          Page 6
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     APPENDIX 3 - Extract from the Coopers Constitution

This is an extract only included for the convenience of Shareholders. Shareholders should not rely on
this document but, instead, review a copy of the full terms of the Coopers Constitution, which can be
obtained by calling Haydn Duffield, Company Secretary, on (08) 8440 1860, Monday to Friday between
9.00am and 5.00pm (Adelaide time).




                                MEMORANDUM OF ASSOCIATION
                                                      of
                                 COOPERS BREWERY LIMITED
                                            (ACN 007 871 409)


6.     A special resolution:-
       (a)    altering or omitting Articles 45 to 54 (inclusive) or 141 of the Articles of Association of the
              Company; or
       (b)    purporting to amend or delete an existing article or insert a new article, which is inconsistent
              with the rights granted to Lion Nathan Australia Pty Limited (ACN 008 596 370);
       does not have any effect unless and until the consent of Lion Nathan Australia Pty Limited
       (ACN 008 596 370) is obtained.
7.     A special resolution altering or omitting regulation 6 of the Memorandum of Association of the
       Company, does not have any effect unless and until the consent of Lion Nathan Australia Pty Limited
       (ACN 008 596 370) is obtained.
8.     Regulations 6 and 7 of this Memorandum of Association will cease to have effect on a Change in
       Control (as that term is defined in Article 50A of the Articles of Association as at the date of adoption
       of this Regulation) of Lion Nathan Australia Pty Limited (ACN 008 596 370) or if Lion Nathan
       Australia Pty Limited (ACN 008 596 370) and its related bodies corporate cease to be substantial
       brewers of beer.




                                                                                                              1
     APPENDIX 3 - Extract from the Coopers Constitution

                                                ARTICLES OF ASSOCIATION
                                                                      of
                                               COOPERS BREWERY LIMITED
                                                               (ACN 007 871 409)


2.          (p) “Members relative” means, in relation to a member who is a natural person:-
                    (i)       the spouse of a member within the meaning of the Family Relationships Act (SA) 1975;
                              or
                    (ii)      a relative1 within the meaning of the Administration and Probate Act (SA) 1919; or
                    (iii)     the issue of a spouse or relative; or
                    (iv)      a company which acts as trustee of a trust of which such member is the sole beneficiary
                              or of a discretionary trust which in the opinion of the Directors was created wholly for
                              the benefit of that person or a family group of which that person is a member; or
                    (v)       a company in which such member or persons referred to in (i) to (iv) above have a
                              relevant interest in all of the voting shares and any other class of such company.
                    “Members relative” means, in relation to a member who is a body corporate:-
                    (iv)      a body corporate that, as at the date of adopting of this Article or admission of the body
                              corporate as a member, is related to such member pursuant to Section 50 of the
                              Corporations Law; or
                    (vii)     any person or group of persons who, as at the date of the adoption of this Article or
                              admission of the body corporate as a member, are in a position to cast or control more
                              than one half of the maximum number of votes that might be cast at a general meeting
                              of such member or of a body corporate referred to in sub-paragraph (vi) above; or
                    (viii) the spouse, within the meaning of the Family Relationship Act (SA) 1975, of any
                           person or of any member of a group of persons referred to in sub-paragraph (vii) above;
                           or
                    (ix)      a relative, within the meaning of the Administration and Probate Act (SA) 1919, of any
                              person or of any member of a group of persons referred to in sub-paragraph (vii) above;
                              or
                    (x)       the issue of a spouse or relative of a person or of any member of a group of persons
                              referred to in sub-paragraph (vii) above.
          (q)       Notwithstanding any other provision of these Articles the term “Members relative” does not
                    include an entity that is controlled (within the meaning of section 243E of the Corporations
                    Law) by a person that who, if a member, might be required to retire pursuant to Article 143.

Notes:
1    Includes a parent, sibling, grandparent, aunt or uncle.


2
      APPENDIX 3 - Extract from the Coopers Constitution

38.     Notwithstanding the provision of any other Article including Article 54, the Directors must register
        any transfer of shares which requires registration and which is expressly permitted by Articles 40-53 or
        which is made in compliance with such Articles. No member may make any transfer of shares and the
        Directors must not register any transfers of shares without complying with Articles 40-53.
39.     In Articles 38-53, “transfer” includes:
        (a)    sell, assign, offer, dispose of, transfer or deal in any way with any right, title or interest in any
               share (whether legal or beneficial and whether for valuable consideration or not); and
        (b)    to agree to sell, assign, offer, dispose of, transfer or deal in any way with any right, title or
               interest in any share (whether legal or beneficial and whether for valuable consideration or
               not); and
        (c)    create, declare or allow to be created any trust over any share.
        A member shall be entitled to mortgage, charge or otherwise encumber its shares provided that if the
        person taking the mortgage, charge or encumbrance seeks to become or have some other person
        become the registered holder of the shares the member will then be deemed to have offered to sell
        those shares to the other members. In such event that member irrevocably authorised and empowers
        the Directors and for such purposes appoints the Directors as its agent and attorney to sign a Transfer
        notice under Article 40 with respect to those shares. The price of those shares will be the value as
        certified by the Auditor under Article 42.
40.     Except where the transfer is made pursuant to Article 53 the person proposing to transfer any share
        (hereinafter called “the proposing Transferor”) shall give notice in writing (hereinafter called “the
        Transfer Notice”) to the Company that the proposing Transferor desires to transfer the same. Such
        Transfer Notice shall specify the sum the proposing Transferor fixes as the fair value and shall
        constitute the Company agent of the proposing Transferor for the sale of the share to any member of
        the Company at the price so fixed or at the option of the Purchaser at the fair value to be fixed by the
        Auditor in accordance with these Articles. A Transfer Notice may include several shares and in such
        case shall operate as if it were a separate notice in respect of each. A Transfer Notice shall not be
        revocable except with the sanction of the Directors.
41.     The Directors shall on the receipt of such Transfer Notice endeavour to find a member or a Member’s
        relative of any such member willing to purchase the same and if within the space of 28 days after being
        served with a Transfer Notice the Directors shall find a member or a Member’s relative of any such
        member willing to purchase the share (hereinafter called “the Purchasing Member”) and shall give
        notice thereof to the proposing Transferor, the proposing Transferor shall be bound upon payment of
        the price so fixed as aforesaid or the fair value as the case may require to transfer the share to the
        purchasing member.
42.     In case any difference arises between the proposing Transferor and the Purchasing Member as to the
        fair value of a share, the Auditor shall, on application of either party, certify in writing the sum which
        in the Auditor’s opinion, is the fair value and such sum shall be deemed to be the fair value and in so
        certifying the Auditor shall be deemed to be acting as an expert, and not as an arbitrator, and
        accordingly the Commercial Arbitration Act shall not apply.

                                                                                                                  3
      APPENDIX 3 - Extract from the Coopers Constitution

43.     If in any case the proposing Transferor, after having become bound as aforesaid makes default in
        transferring the share, the Company may receive the purchase money and shall thereupon cause the
        name of the Purchasing Member to be entered in the register as the holder of the share and shall hold
        the purchase money in trust for the proposing Transferor. The receipt of the Company for the purchase
        money shall be a good discharge to the purchasing member and after the name of the purchasing
        member has been entered in the register in purported exercise of the aforesaid power the validity of
        the proceedings shall not be questioned by any person.
44.     If there is a Change in Control in any member, that member is deemed to have offered to sell all of its
        shares to the other members. In such event that member irrevocably authorises and empowers the
        Directors and for such purposes appoints the Directors as its agent and attorney to serve a Transfer
        Notice under Article 40 with respect to the shares held by such a member. The price of the shares will
        be the value as certified by the auditor under Article 42.
        For the purposes of this Article, ‘Change in Control’ means any transfer of any shares or other equity
        interest in a member or in any entity that directly or indirectly controls or influences the member or
        any reconstruction, amalgamation or reorganisation of a member or any entity that directly or
        indirectly controls or influences the member if, after such transaction, there would be a change in the
        person having the power to direct its management and policies, or if no one person has such power, a
        change in the majority of such persons who, acting together, have such power or, without limiting the
        generality of the foregoing, if any person acquires a relevant interest (as that term is defined in the
        Corporations Law) in 40% or more of the voting shares of the member.
        For the purposes of this Article no Change of Control will occur where the person or persons having
        the power or interest referred to above following the relevant transactions are persons who would be
        permitted transferees in terms of Article 53 of the person or persons who previously had that power or
        interest, if such person or persons who previously had that power or interest had been a member or
        members of the Company.
45.     Articles 40 to 46 so far as they give rights to a member to purchase shares in a Transfer Notice, shall
        not include in relation to a particular Transfer Notice a member of the Company that is first registered
        as a member following the date that such Transfer Notice is given to the Company.
46.     If the Company and the Directors do not find a member or a Member’s relative willing to purchase all
        or any of the shares referred to in the Transfer Notice within the 28 day period set out in Article 41
        the Company must offer the remaining shares to Australian Mutual Provident Society
        (ARBN 008 387 371) and to any other trustee of a superannuation fund (of a kind referred to in
        Regulation 7.12.06 of the Corporations Regulations) in which more than 10% of the employees of the
        Company are members at that time (the “Institutions”) at a price equal to the price at which the shares
        were offered to the members under Articles 40-43. Such purchase by the Institutions may be made
        either in their own capacity or as Trustee of the superannuation fund.




4
      APPENDIX 3 - Extract from the Coopers Constitution

47.     Within 28 days after notification under Article 46, the Institutions must notify the Company of the
        number of shares (if any) which it or a wholly owned subsidiary of the Institution desires to purchase.
        The Company shall give notice thereof to the proposing Transferor, and the proposing Transferor shall
        be bound upon payment of the price fixed by the Transfer Notice or the fair value as the case may
        require to transfer the shares to the Institutions or its wholly owned subsidiary.
48.     A failure by the Institutions to notify within 28 days is deemed to be notice of an election not to
        purchase any shares.
49.     If the Institutions or a wholly owned subsidiary of the Institutions have not purchased all or any of the
        shares referred to in the Transfer Notice within the 28 day period referred to in Article 46, the
        Company must offer the remaining shares to Lion Nathan Australia Pty Limited (ACN 008 596
        370) at a price equal to the price at which the shares were offered to the members under Article 40-
        43.
50.     Within 28 days after notification under Article 49, Lion Nathan Australia Pty Limited (ACN 008
        596 370) must notify the Company of the number of shares (if any) which it desires to purchase. The
        Company shall give notice thereof to the proposing Transferor and the proposing Transferor shall be
        bound upon payment of the price fixed by the Transfer Notice or the fair value as the case may require
        to transfer the shares to Lion Nathan Australia Pty Limited (ACN 008 596 370).
51.     A failure by Lion Nathan Australia Pty Limited (ACN 008 596 370) to notify the Company within
        28 days is deemed to be notice of an election not to purchase any shares. The provision of Articles 42
        and 43 apply to Articles 49 to 51 and for the purposes of Articles 42 and 43, ‘purchasing member’
        means the Institutions (or its wholly owned subsidiary) or Lion Nathan Australia Pty Limited (ACN
        008 596 370) (as the case may be).
52.     If the Company shall not within the times set forth in Articles 41, 47 and 50 as the case may require
        find a person willing to purchase the shares and give notice in the manner aforesaid the proposing
        transferor shall at any time within three calendar months afterwards be at liberty subject to Article 54
        to sell and transfer the shares (or those not placed) to any person at a price no lower and on terms no
        more advantageous than those offered under Articles 40-51. If there is any inconsistency between
        Articles 40-51, 54, 125(f), 143 and any other Articles of the Company, the provisions of Articles 40-
        51, 54, 125(f) and 143 prevail.
53.     Any share may be transferred by a member to any Member’s relative of that member and any share of
        a deceased member to any Member’s relative of that deceased member and shares standing in the name
        of the trustees of the will of any deceased member may be transferred on any change of the trustee to
        the trustees for the time being of such will and the restrictions in Articles 38 shall not apply to any
        transfer authorised by this Article.




                                                                                                               5
      APPENDIX 3 - Extract from the Coopers Constitution

54.     The Directors may refuse to register any transfer or a share:-
        (a)    where the Company has a lien on the share; or
        (b)    where the Directors are of the opinion that it is not desirable to admit the proposed transferee
               to membership;
        but this paragraph shall not apply where the proposed transferee is already a member nor to a transfer
        made pursuant to Article 53 or Articles 46-51 inclusive. The Directors must refuse to register any
        transfer for a share where, in accordance with Article 143, that person may be required to retire as a
        member.
143.    No member, shall without the consent in writing of the Directors be interested as a shareholder,
        partner, director, manager, lender or otherwise in any concern carrying on any business in competition
        with the Company, or having interests inconsistent with those of the Company, and if it shall be
        proved to the satisfaction of the majority of the Directors that any member has committed a breach of
        this clause they may serve him with notice in writing requiring him to retire from or otherwise
        determine his interest in such concern and stating that in the event of non-compliance with such
        requisition within twenty-eight days his shares will be liable for sale by the Company in like manner
        as if the offending member had given notice of desire or intention to transfer his share in manner
        prescribed by Article 40. For the purposes of this Article the South Australian Brewing Company Pty
        Limited, Lion Nathan Australia Pty Limited (ACN 008 596 370) and any related corporate of Lion
        Nathan Australia Pty Limited (ACN 008 596 370) (the “Lion Nathan Companies") shall be
        deemed not to be a concern carrying on business in competition with the Company. Any interest in
        the Lion Nathan Companies in their businesses or any part of their businesses shall be deemed not to
        be inconsistent with the interests of the Company and Article 143 does not apply to or in respect of
        any interest which the Lion Nathan Companies may have in any other concern or business. For the
        purposes of this Article a member shall be considered to be carrying on a business in competition if
        any entity that directly or indirectly controls or influences that member (or is under common control
        or influence with a person that controls or influences that member) carries on a business in
        competition.




6
      APPENDIX 4 - Share Allocation Policy

Introduction
The purpose of this Policy is to set out how the Directors of Coopers Brewery Limited (Coopers) will allocate
shares that are the subject of Transfer Notices (Transfer Shares) in accordance with the first tier pre-emptive
rights under Article 41 of the Constitution, which requires the Directors, on receipt of a Transfer Notice, to
endeavour to find a Member or Member’s relative willing to purchase the Transfer Shares.
Terms defined in the Constitution have the same meaning in this Policy.

Policy
From the date of adoption of this Policy, allocations of shares under Article 41 of the Constitution will
proceed in accordance with the priority set out below.
The Company Secretary will maintain a list of Members who wish to be contacted in the event that Transfer
Shares become available for purchase. Members may also nominate for listing one or more Member’s relatives
of that Member to be included on the list.
When a Transfer Notice is received, the Company Secretary will seek expressions of interest in relation to
the Transfer Shares from all Members who hold shares in the same class as the Transfer Shares.
In response to that expression of interest:
(a)     If all Members who expressed an interest in the Transfer Shares expressed an interest to purchase, in
        aggregate, more than the total number of Transfer Shares, the Transfer Shares shall be allocated to
        those Members who expressed an interest pro rata to their existing shareholding of shares in the
        relevant class (except that no Member shall be required to purchase more Transfer Shares than
        nominated in their expression of interest).
(b)     If all Members who expressed an interest in the Transfer Shares expressed an interest to purchase, in
        aggregate, less or the same number as the Transfer Shares, those Members shall be selected as
        purchasers of the number of Transfer Shares they expressed an interest to purchase.
(c)     If there is any surplus of Transfer Shares, the Company Secretary will seek expressions of interest in
        respect of those shares from all other Members. The allocation of shares to Members in response to
        that expression of interest will be in accordance with paragraphs (a) and (b) but without share class
        distinctions.
(d)     If, after the procedure in paragraph (c) is implemented, there remains any surplus of Transfer Shares,
        the Company Secretary will seek expressions of interest in respect of those shares from all listed
        Members’ relatives who continue to be a Member’s relative of the Member who nominated them for
        listing. The allocation of shares to Members’ relatives in response to that expression of interest will
        be in accordance with paragraphs (a) and (b) but without share class distinctions. For the purpose of
        this allocation, each Member’s relative will be deemed to have the shareholding of the Member who
        nominated him or her for listing and, where a Member has nominated more than one Member’s
        relative, the deemed shareholding will be divided equally among them.




                                                                                                             1
    APPENDIX 4 - Share Allocation Policy

In allocating shares pursuant to this Policy, there shall be no discrimination between eligible Members or
Members’ relatives who express an interest in acquiring Transfer Shares at the price specified in the Transfer
Notice and those who express an interest in acquiring Transfer Shares at the fair value to be fixed by the
Auditor.
If any surplus Transfer Shares remain, those shares will become subject to the second tier pre-emptive rights
under Article 46 of the Constitution.

Discretion
The Directors reserve a discretion to exclude particular persons from the above process if, in their opinion, it
is appropriate to do so having regard to the particular circumstances that then exist.

Adopted by the Board of Directors on 11 November 2005.




2
Your Company’s history
Thomas Cooper established his brewing business in the new colony of
South Australia in 1862.
South Australia was only 26 years old and times were tough in the
brewing industry with a number of large, highly competitive breweries
already established. But Thomas Cooper was a born entrepreneur with
barrels of energy, purpose and vision.
He discovered his talent as a brewer by accident when his wife asked him
to brew up a batch of ale to be used as a tonic from an old family recipe. Word quickly spread and he soon
found himself brewing the now world-famous Coopers Sparkling Ale and Extra Stout for a growing band of
loyal customers. As his brewery flourished, Thomas delivered by horse and cart direct to the homes of his
customers, a Coopers tradition which survived until the 1920's.
Thomas Cooper died in 1897 and left Coopers Brewery as a partnership to his sons John, Christopher, Samuel
and Stanley who continued the family tradition of brewing the highest quality product. By the turn of the
century, even its competitors regarded Coopers as a brewer of distinction and over the next couple of
decades more and more hotels sold Coopers products.
Through the difficulties of the Great Depression of the 1930s and the turmoil of two world wars, successive
generations of the Cooper family continued to brew fine ales, beers and stouts the natural, traditional way.
Over time, Coopers Brewery moved from a partnership to become an incorporated company in 1923.
As Australia’s brewing companies began to consolidate in the 1960s, Coopers and SA Brewing Holdings (now
Southcorp) agreed to take a cross-shareholding in each other, to help protect against hostile takeovers.
When Lion Nathan acquired the brewing assets of SA Brewing Holdings in 1993, a dispute arose as to the
status of this shareholding in Coopers. This dispute was settled in 1995 in conjunction with the settlement
of another dispute in relation to the Adelaide Bottling Company: Lion Nathan gave up its claim to the
shareholding and the Coopers Constitution was amended to give it a third tier pre-emptive right. Coopers
then continued on as an independent brewer, with increasing success.
The family has continued to balance tradition with innovation, eg with the purchase and development of its
Regency Park brewery. Regency Park became the new home of Coopers Brewery at the end of 2001. With an
increased brewhouse capacity (two and a half times that of Leabrook), the new $45 million brewery now
represents an intriguing fusion of modern innovation and Coopers' brewing tradition. In 2003, the Company
established Premium Beverages, to drive interstate sales and distribution.
Despite many changes, successive Cooper generations have never lost sight of Thomas Cooper's vision of
providing value and quality. Coopers Brewery products are now marketed nationally and internationally, in
a determined way that has ensured the Coopers brand is well known beyond its South Australian home.
Today, Coopers is Australia's sole remaining family owned brewery of significant scale. It is still an every day
occurrence to meet a Cooper at Coopers Brewery. Dr Tim Cooper is the Managing Director and still keeps a
keen eye on the brewing. Mr Glenn Cooper AM is Chairman and Marketing Director. Mr Bill Cooper
remains on the Coopers Board of Directors, having retired from the position of Managing Director in February
2002. Maxwell Cooper retired from his Chairman’s position at the same time. Melanie Cooper and
Matthew Cooper also work at the Brewery in financial and sales positions. Other family members also keep
an eye on things from the Boardroom.
So our customers, employees and Shareholders can rest assured we are keen to ensure Coopers Brewery
continues to have the same values as Thomas Cooper and believe in the product that Thomas himself
began brewing all those years ago.
The original Coopers Brewery (circa 1893).
 Started in 1881 in Coopers Paddock in
       Upper Kensington, Adelaide.

				
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