Foster’s takeover uncertain as SABMiller reassess their offer

One of the most talked about issues in the food and beverage industry at the moment is the possible multi billion dollar takeover of Foster’s Group.

Below is a brief breakdown of the action so far.

  • Last Tuesday SABMiller, the Anglo-South African brewer, offered Foster’s group an ”unsolicited, incomplete, non-binding and conditional proposal” of $4.90 a share, which amounted to $9.5 billion.
  • Foster’s chairman, David Crawford, was in London at the time for a BHP Billiton meeting, but immediately summoned a Foster’s board meeting, during which the offer was rejected. The “non-binding and incomplete” offer was said to “significantly” undervalue the company.
  • Following a briefing with SAB boss Graham Mackay after the initial offer was rejected, analysts expressed skepticism over the logic of a Foster’s acquisition, which was later reflected by a 3.6 percent slip in SABMiller’s share prices.
  • SAB Miller has agreed to pay Coca-Cola Amatil between $305m and $380m to relinquish its 50 per cent share of Pacific Beverages, if it makes a successful bid for Foster’s.
  • Elsewhere independent Australian brewers expressed interest in the deal, believing that if Foster’s is sold to an overseas group, Australian consumers might begin to look for an alternative independent, locally brewed beer.
  • As the SABMiller team leave Sydney for London on Friday, Foster’s ended the week with shares trading at $5.20.
  • SABMiller’s main rivals, including Anheuser-Busch InBev, Asahi and Heineken are thought to have kept a keen interest in the proceedings and analysts believe Foster’s might use the coming weeks to drum up interest from other potential bidders.

Image courtesy of www.kaneva.com

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