AUS: SABMiller eyeing higher Foster's Group bid - report
SABMiller eyeing new Foster's Group bid?
SABMiller would be willing to slightly increase its current AUD4.9 per share cash offer for Foster's, Reuters reported today (10 August), citing investment bankers with knowledge of the situation. However, the Peroni brewer is waiting for Foster's' results statement on 23 August, the report said.
The two companies have reached an impasse over the current bid, with neither willing to make the next move. Foster's has rejected SABMiller's AUD9.5bn offer - AUD11.2bn including debt - as too low, while, privately, SABMiller has let it be known that it is content to allow Foster's to "stew" for a while.
Last week, amid a general stock market slide around the world, Foster's saw its share price fall below SABMiller's bid price for the first time since the takeover offer became public, in late June. Foster's had hovered at AUD5 or above following news of the bid, but it sank back to AUD4.51 on Tuesday.
Subsequently, shares have rallied to AUD4.93, but some analysts believe the slip plays into SABMiller's hands by lowering the price expectations of Foster's shareholders. "I bet they are licking their lips at the opportunity the stock price is providing," Morningstar analyst Phil Gorham told just-drinks earlier this week. However, he added that the strengthening AUD against the US dollar would nullify some of the advantages. SABMiller reports in US$.
Foster's full-year results could be key. Last week, Nielsen data showed that Foster's beer market share in Australia fell from 49.1% at the end of March to 48.7% at the end of June, on a moving annual total basis.
So far, SABMiller remains the only bidder for Foster's and it may hope to pounce on a disappointing Foster's performance. That said, many analysts believe that the Peroni brewer is working on a tight margin of error. It may not be able to secure a satisfactory return on investment with a bid that is significantly higher than its current one.
The second part of January's management briefing sees Spiros Malandrakis and Zsuzsa Szilagyi, alcoholics drinks analysts at Euromonitor International, turn their attention to beer and cider. What doe...
Pete Brown is back, refreshed, raring to go, and pondering the future. "Which way will beer go in 2012?", he asks the tea leaves....
SABMiller's Chinese joint-venture, CR Snow Breweries, could get a second chance to dig its claws into Kingway Brewery and mount a stronger challenge to Tsingtao in the country's Guangdong province....
SABMiller has appointed new heads for its Royal Grolsch and Birra Peroni beer businesses....
- Interview - Bacardi global marketing boss, whisky
- Comment - Hybrid Spirits: Innovation or Laziness?
- Has Coca-Cola Jumped From Frying Pan to Fire?
- Constellation grapples with glass as reality bites
- Brewers Feel Prolonged Russian Winter
- Mast-Jägermeister targets UK off-trade boost
- Diageo doubles intake for spirits start-ups scheme
- Second senior exec to depart Bacardi
- Portman finds against Diageo "mix it up" tagline
- Bacardi sees North America president step down