SABMiller launches hostile takeover bid for Foster’s
SABMiller has launched a hostile takeover bid for Foster’s, worth A$9.5 billion ($10 billion), after the Australian brewer refused to negotiate on its initial proposal two months ago. SABMiller said Wednesday that it would put its A$4.90 per share cash bid – the same as that offered in June, which values Foster’s at 12.5x EBITDA – directly to shareholders.
Analysts had expected SABMiller to wait until after Foster's reported its full-year results next week, which are expected to be weak, but apparently the brewer was spurred into action by the Foster's share price briefly fell below its indicative offer, The Financial Times reported. Foster's shares have been hit by the turbulence in the global markets and rose a fraction to A$4.96 on news of the hostile bid.
Foster's rejection of SABMiller's original offer as too low was expected to spark a global battle for the brand but no alternative offers are believed to have been put forward, further strengthening SABMiller's position.
In May, Foster's spun off its unprofitable wine unit, Treasury Wine Estates, into a separate listed company in order to become a beer-focused business. Foster's said it would be open to offers from private equity and trade suitors, but the asset remains on the market. A A$2.46 billion offer reportedly tabled by US-based Cerberus Capital Management was dismissed as "totally inadequate."
Unconfirmed reports suggested that both TPG and KKR were also in negotiations with Foster's.
Treasury Wine Estates' worth has been estimated at A$3.1 billion. It owns the Lindemans, Rosemount, Penfolds and Wolf Blass brands.
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