• Independent advisor says offers likely
  • Treasury Wine Estates to trade on ASX from 5 May
  • Foster's board unanimous on demerger
Fosters Group demerger date draws near

Foster's Group demerger date draws near

Foster's Group's own advisor has told it that a demerger of the firm's beer and wine arms will open up both divisions to takeover offers, with Treasury Wine Estates set to begin trading on Australia's stock exchange in early May.

Grant Samuel, the independent advisor to Foster's on the demerger plan, has echoed the opinion of several analysts that takeover offers are likely for the company's separated beer and wine divisions.

"The proposed demerger should increase the likelihood of shareholders receiving a takeover offer for New Foster's and/or Treasury Wine Estates and maximised the prospects of achieving full underlying value," said Grant Samuel. Its comments are published in Foster's demerger prospectus, which it has dispatched to shareholders today (29 March).

In a covering note to the prospectus, Foster's said that its board is unanimous in its support for the demerger, which will split Treasury Wine Estates (TWE) from Foster's Australian beer business, Carlton & United Breweries.

TWE is expected to begin trading on the Australiam stock exchange on 5 May, although this will be on a deferred settlement basis until 24 May, Foster's said in the prospectus.

According to the document, the CEO of TWE, David Dearie, will receive a fixed annual salary of AUD1.35m (US$1.38m). The new CEO of Foster's, John Pollaers, will be paid a fixed annual salary of AUD1.4m. In the first fiscal year following the demerger, to the end of June 2012, both could receive bonuses worth up to 150% of their fixed salary, depending on their companies' financial performance.

Foster's said that both its beer and wine businesses are working on cost savings programmes, to be implemented following the demerger. It did not specify figures or targets for savings.

Foster's shareholders will be asked to endorse the demerger plan on 29 April.