SABMiller, Fosters Group re-jig takeover payment plan

SABMiller, Foster's Group re-jig takeover payment plan

SABMiller has raised its cash offer for Foster's Group after Australian tax authorities rejected a plan for Foster's to hand money back to its own shareholders in advance of the deal going through.

Foster's said today (18 November) that Australian tax authorities have forbidden the company from completing a planned AUD0.3 per share capital return to shareholders. The payment formed part of a sweetener offered by Foster's to its own shareholders as part of the board's decision to accept a takeover offer from SABMiller.

Following news of today's ruling, SABMiller said that it will effectively raise its cash takeover offer for Foster's from AUD5.1 per share to AUD5.4, to ensure that Foster's shareholders still receive the amount of money originally promised.

The Peroni Nastro Azzurro brewer highlighted that the tax ruling does not change the takeover deal's enterprise valuation of Foster's, which stands at AUD11.5bn including debt. It does, however, mean that SABMiller will make a higher direct payment to secure Foster's, which is Australia's largest brewer ahead of Kirin-owned Lion Nathan.   

In total, Foster's shareholders are still set to receive AUD5.5325 per share, assuming that they back the SABMiller takeover deal in a vote scheduled for 1 December. "This amendment does not increase the acquisition enterprise value and does not change the total cash received by each Foster's shareholder," SABMiller said today.