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AUS: Foster's Group issues plea to shareholders

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Foster's Group has formally urged its shareholders to reject an expected hostile takeover bid from SABMiller.

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Foster's has repeated its charge that SABMiller's AUD4.9 ($5.07) per share cash offer "significantly undervalues" the Australian brewer. In a letter to all of its shareholders, Foster's management added that SABMiller's planned hostile takeover bid is "also highly conditional and subject to significant uncertainty".

SABMiller is preparing to go direct to Foster's shareholders following a near-three-month standoff with the Victoria Bitter brewer's board. During that time, Foster's' share price has struggled for momentum. It fell by 1.6% to AYD4.83 on the Australian Stock Exchange today (12 September).

Foster's said in its letter, dated today, that SABMiller's true bid price is just below AUD4.77 per share. The Peroni brewer has said that it will subtract any full-year dividend offered by Foster's from its offer price.  

The Australian brewer asked shareholders for more time to prove itself, after spinning off Treasury Wine Estates in May. "The longer-term benefits of the demerger have not yet been realised," said Foster's' chairman, David Crawford.

"You will soon receive a document from SABMiller," he told shareholders. "You should take no action when you receive this document. Do not fill in any documents sent to you by SABMiller."

Crawford reiterated Foster's' confidence in its ability to achieve further cost savings in Australia. The group plans to reach savings of AUD55m by the end of fiscal 2013 and Crawford said that a second phase of initiatives will finalised "in the coming months". The group has also said that it will hand at least AUD500m back to shareholders in the next 12 months. 

Last week, Foster's was forced to defend itself against SABMiller's allegations that it has issued incomplete profits guidance and misleading debt statements. 


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