AUS: Foster's Southcorp splurge hits rating
Foster's has had its rating downgraded following its takeover of Southcorp. Ratings agency Standard & Poor's has said it is concerned about high debt levels and the high-risk nature of the wine sector.
Foster's rating was lowered by the agency by one notch to 'BBB' yesterday (12 May). S&P warned that it could drop the rating by one more level pending the outcome of the takeover bid. This depends on the company's ability to integrate Southcorp's operations and the pace of recovery of Foster's debt profile after it completed the deal.
Speaking to Australian Financial Review, S&P corporate and infrastructure finance credit analyst Brenda Wardlaw said that the Foster's business was being substantially skewed towards the wine sector with the Southcorp acquisition.
"It's the strength and stability of the cash flows of the brewing business that forms a significant part of the credit analysis," she told the Review.
A revised assessment by Southcorp's independent expert has valued the company's shares closer to the bid value offered by Foster's Group....
Australian liquor giant Foster's bid for winemaker Southcorp is gathering momentum....
As one takeover story trundles on, another one has just moved up a gear....
The chief executive of Foster's believes the global premium wine industry is on the upturn....
Foster's Group Ltd is expected to announce that it is lifting its offer for fellow Australian Southcorp, transforming three months of corporate hostility into a friendly takeover....
Shares in Southcorp and Foster's have been halted from trading, pending an announcement....
Southcorp's share price has dropped below the offer price made by Foster's for the first time today (18 April)....
Foster's Group is considering upping its bid for Southcorp prior to extending its offer once again....
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