Melbourne: Japanese-controlled Australasian alcoholic beverages company Lion Nathan Ltd, which is also Australia's second-largest brewer, is reported to have launched a A$7.6 billion ($4.9 billion) bid for soft drinks group Coca-Cola Amatil, which bottles and distributes several soft drinks of the US cola giant, in addition to its own line of soft drinks and mineral waters.

The cash-and-stock bid, which offered a 25 per cent premium to Coca-Cola Amatil's share price, helped boost Coca-Cola Amatil's shares price, though not to the level of the offer. 

Coca-Cola Amatil said Lion Nathan's bid had a material weaknesses and looked ''cheap'' compared to recent deals.

Coca-Cola Amatil is 30 per cent owned by the US-based cola giant The Coca-Cola Company. A successful take-over would give Lion Nathan a commanding 60 per cent share of Australia's A$10.3 billion soft drinks market, along with a position in the canned fruits and vegetables business.

Lion Nathan is 46 per cent owned by Kirin Brewery Co, which ensures synergies from a possible deal as little cannibalisation between the businesses, and savings of around A$130 in unified distribution to pubs, restaurants and caterers.

Nearly a month ago, France's Group Danone had offloaded its Australia and New Zealand bewerages arm Frucor for 14 times its earnings before interest, tax, depreciation and amortisation. That was substantially higher than the 10.3 times Lion Nathan is offering for Coca-Cola Amatil, even though Lion Nathan contends that Frucor is not a fair comparison, being a a small company which owned its brands, unlike Coca-Cola Amatil whose main business is bottling for Coca-Cola.

Lion Nathan was reported to have made the bid on 7 November. In its statement, Lion Nathan said that its had sought the endorsement and recommendation of the board of Coca-Cola Amatil, saying that it believed the proposal was in the best interests of both Coca-Cola Amatil's shareholders and Lion Nathan shareholders.

Coca-Cola Amatil has rejected Lion Nathan's bid saying that the scheme was "not attractive'' to its largest shareholder, besides the fact that a number of other conditions would have to be met by Lion Nathan before Coca-Cola would consider an offer.

The largest shareholder is The Coca-Cola Company, with its 30 per cent in Coca-Cola Amatil. In a statement to the Australian Securities Exchange, Coca-Cola Amatil said its largest shareholder was of the opinion that the proposal was "not attractive, and that a number of other conditions would need to be satisfied for its support''. On that count, the company's board decided not to proceed with further review of the proposal.