A whopping $3.5 billion bid by Japanese brewing giant Kirin for Lion Nathan is at the high end of valuations for the company. It is being expected that it will be well accepted by the shareholders too.

"Kirin's $12 per share bid was at the high end of its valuation for Lion, and could be worth another 21c per share based upon the franking credits associated with it," said Lonergan Edwards & Associates, in its report released to the Australian Securities Exchange.

It has appeared that Lion was valued at $10.95 to $12.21 per share, with a mid-point of $11.58 by Lonergan Edwards.

If in case at a meeting on 17th September, the scheme of arrangement to merge the two companies is adopted, then Lion Nathan's shareholders will be paid $11.50 per share in cash, plus a 50c per share, fully-franked special dividend.

If the scheme is to succeed, the non-Kirin shareholders, holding over 75 per of the shares, must vote in favor of it.

As per Lonergan Edwards, "Since Kirin already owned 46.1 per cent of Lion, and no competing offers had been made since the bid was announced on April 23, there was no realistic likelihood that a competing offer for Lion Nathan shares will be received prior to the scheme meeting."

The independent expert concluded: "If the scheme does not proceed, and in the absence of an alternative offer or proposal, the price of Lion Nathan shares is likely to trade at a significant discount to our valuation and the cash payments."