Foster's rejects SABMiller
Foster's Group has rejected a takeover bid by US label SABMiller, branding the A$9.5 billion ($10 billion) as offer too low. The move comes one month after the Australian firm spun off its distressed wine brand - provoking considerable interest from private equity - in order to make its remaining business more desirable.
According to a statement, South Africa-based SABMiller offered Foster's A$4.90 per share in cash - up from the company's last trading price of A$4.53 - which Foster's believes "significantly undervalues the company in the context of a change of control."
The Australian firm is being advised by Goldman Sachs, Gresham and Allens Arthur Robinson.
The decision is expected to spark a global battle for the brand, which claims a 50% market share in Australia, and comes amid a period of consolidation for global beer and liquor labels. Shares in Foster's rocketed 13% in response to the SABMiller offer, and industry analysts speculate that brands ranging from Corona maker Grupo Modelo, with Molson, to Anheuser-Busch InBev may launch acquisition bids.
The spin off of Foster's Treasure Wine Estates wine brand has yet to result in an acquisition, despite David Crawford, chairman of Foster's Group, confirming six months earlier that it would entertain offers from PE and trade suitors. He iterated that the A$2.46 billion offer reportedly made by US-based Cerberus Capital Management was "totally inadequate." Unconfirmed reports suggested that both TPG and KKR were also in negotiations with Foster's.
Treasure Wine Estates' worth has been estimated at approximately A$3.1 billion ($3 billion). It owns the Lindemans, Rosemount, Penfolds and Wolf Blass brands, and currently trades on the Australian Securities Exchange.
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