Fosters Group CEO claims to have inward focus

Foster's Group CEO claims to have inward focus

Foster's Group's CEO has said that the brewer is not engaging with SABMiller and is intent on progressing as a standalone beer business.

John Pollaers said in an interview on Australia's ABC News that Foster's is not engaging SABMiller in relation to SAB's AUD9.5bn (US$10.2bn) takeover offer. "Our focus is let SABMiller do what they need to do," he said. "Our focus is on developing this business."

It is almost two weeks since Foster's announced that it had rejected SABMiller's initial advance. Many analysts have questioned how much higher SABMiller could take its offer and still reap financial rewards from the deal.

So far, the Peroni Nastro Azzurro brewer has sat back to see how the situation develops. It remains unclear whether there is another brewer to rival SABMiller's bid, with only Grupo Modelo linked to a possible offer.

Pollaers denied that Foster's decided to demerge its beer and wine businesses in order to facilitate a takeover.

In late March, it emerged that Grant Samuel, the independent advisor to Foster's on the demerger plan, believed that the demerger "should increase the likelihood of shareholders receiving a takeover offer for New Foster's and/or Treasury Wine Estates".

Despite declining demand for beer in Australia and market share losses for Foster's specifically, the attraction of the beer business is that it remains the country's biggest brewer and has some of the highest profit margins in global brewing.

"You'd find few companies with the kind of cash generation that we've produced over the years and continue to do so as well," said Pollaers, who added that Foster's cashflow conversion has been around 100% "for a very long time".