CCA says the stock price is too high to purchase Fosters

CCA says the stock price is too high to purchase Foster's

Coca-Cola Amatil (CCA) director Terry Davis has denied speculation that the firm is interested in buying rival beverage firm Foster’s.

In July last year, Davis hinted that the soft drinks group might consider a play for Foster’s' beer unit, should Foster's sell off its wine business. He was quoted in local reports at the time as saying that CCA’s portfolio has no space for wine brands.

The firm also appointed former Foster’s Group executive John Murphy as managing director of licensed/alcohol for its Australasia unit in April.

However, speaking at CCA’s AGM on Friday (14 May), Davis said that while there is a lot of industrial logic in combining beer and soft drinks businesses, it has to be done at a profit

“At $5.40 (Foster's share price) you can't make an acceptable return on your investment,” Davis said.

He added: “While John Murphy spent decades in the beer trade at Fosters, he has come to us from his previous job at Visy. He will be the face of CCA's alcoholic beverages business for our customers across Australia and NZ.”

When contacted by just-drinks today (18 May), a spokesperson for CCA said that Davis had repeatedly said the firm is not interested in acquiring Foster’s.

“The stock price is too high, and we are not at all interested in the wine business, which is still facing some severe headwinds," the spokesperson said. "Terry Davis has also repeatedly stated that he is very happy with CCA's organic growth in our premium alcoholic beverages business.”