The chairman of Foster’s Group has said that investors and advisers have backed the firm’s rationale for demerging its beer and wine businesses, but no final decision has been made.

Expert advisers have so far given their blessing to a demerger after weighing the expected costs against potential benefits for shareholders, David Crawford said. “The work so far has given the board comfort that the underlying assumptions are robust,” he said at Foster’s Group’s Annual General Meeting today (26 October).

He cited Foster’s’ share price, which has risen to its highest point in around two years since the demerger plan was announced, as evidence of investor support for the move. A demerger of Carlton & United Breweries (CUB) and Treasury Wine Estates “can be achieved in the first half of calendar 2011”, he said.

However, Crawford warned that Foster’s could still turn its back on the plan. “This decision is still subject to completion of a detailed evaluation of the issues, costs and benefits to Foster’s shareholders, and an ongoing assessment of prevailing economic and capital market conditions,” he said. A final decision is not thought likely until next year.

Private equity firms and multinational drinks companies are following the Foster’s demerger process closely. If Foster’s does separate its beer and wine arms, then both are expected to receive takeover offers.

Foster’s has already rejected a AUD2.7bn (US$2.67bn) bid for Treasury Wine Estates, believed to be from US-based Cerberus Capital. In beer, SABMiller’s CEO, Graham Mackay, recently admitted to sizing up Carlton & United Breweries.

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Foster’s made clear when it announced the demerger plan in that it would “consider all options to maximise shareholder value”.

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