Blackmores Ltd (ASX: BKL) shares are trading in a fairly tight range today.
Shares in the vitamin and health supplement manufacturer are up 0.2% at the time of writing to $94.48.
That's just below the $95 per share takeover offer lobbed by Japan's Kirin Holdings Company yesterday. That offer values Blackmores at $1.85 billion.
Yesterday's price action, as you may recall, was markedly different.
Following the takeover announcement, released before market open, Blackmores shares rocketed higher. The stock closed up 22.8% yesterday.
What's happening with Blackmores shares?
Blackmores has officially entered into a scheme implementation deed with Kirin to acquire all of its shares.
That remains subject to the usual conditions, including approval from the Foreign Investment Board.
Blackmores' board unanimously recommended shareholders support the scheme. If all goes to plan, management expects a court-convened shareholder meeting sometime in July.
Now, you may be wondering why a company best known for its beer is looking to acquire a vitamin company.
Kirin's CEO Yoshinori Isozaki explained the benefits to his company of acquiring all of Blackmores shares.
"Blackmores presents an exciting opportunity to transform the scale and reach of our health science domain," he said.
Isozaki said Kirin has been transforming itself from a brewing business "to the business model creating value across food & beverages and pharmaceuticals domains, based on the concept of creating shared value".
Takeshi Minakata, director of Kirin's board added:
We believe Blackmores will accelerate the transformation of our health science domain as both Kirin and Blackmores share a vision to improve people's lives through our products as well as a commitment to quality, innovation and investment.
Kirin intends to maintain Blackmores' headquarters and manufacturing operations in Australia.
What is the company's largest shareholder saying?
Marcus Blackmore, the company's largest shareholder, with some 18% of Blackmores shares, is a strong proponent of the scheme.
And he's been less than pleased with the performance of the company that bears his name over the past few years.
Indeed, while last year's performance ticked up, Blackmores shares are far below their $217.98 peak, reached on 31 December 2015.
According to Blackmore (quoted by The Australian):
We've certainly made some dramatic mistakes in the last four years where our earnings per share has gone from more than $4, and then at the AGM last year the board announced a 'solid year and increased earnings per share to $1.25'.
Well, I accused the board of gilding the lily.
Blackmore said that kind of criticism had made him unwelcome at the company over the past two years.
As for why he supports the Kirin offer, he said, "I've had the opportunity of spending a lot of time with Kirin and I don't have any doubt that they would be a good custodian of the brand."
Blackmore added:
When people ask me why would I support a company like Kirin, that's a beer company, I say, well, they're trying to develop their health sciences division. They've already got the number one immunity product in Japan, they've got partial interest in other vitamin companies … so they're not blind to the whole exercise and opportunity.
How have Blackmores shares been tracking?
While still far below their 2015 peak, Blackmores shares are now up 36% over the past year, aided by the big boost delivered from the Kirin takeover bid.
