UPDATE: Foster's Says Aware Of Speculation Of A Bid For The Company
June 03 2011 - 1:29AM
Dow Jones News
Australian brewing giant Foster's Group Ltd. (FGL.AU) said
Friday it had nothing to disclose in regard to a potential buyout
of the brewer after media reports indicated bidders were beginning
to circle.
Foster's shares were up 5.1% earlier in the trading session,
prompting the Australian Stock Exchange to inquire about the
stock's rising price. The group noted the media speculation about a
potential bid but said it didn't have anything to disclose to the
market.
Foster's beer business has long been considered a potential
takeover target amid global consolidation in the brewing industry.
The company's shares lost some momentum in late trading, at 0550
GMT, the stock was up 4.4% to A$4.47 after trading as high as
A$4.62.
Mexican brewer Grupo Modelo SAB de CV (GMODELO.MX) and North
American rival Molson Coors Brewing Co. (TAP) have been exploring a
possible joint bid for Foster's, Bloomberg News reported Thursday,
citing five people with knowledge of the situation. A takeover
could face challenges if brewing giant Anheuser-Busch InBev NV
(BUD), which owns 50% of Modelo, seeks to block a deal, the people
told Bloomberg.
At the current share price, Foster's has a market capitalization
of 8.67 billion Australian dollars (US$9.26 billion).
Foster's announced it would officially demerge its wine and beer
assets in February, a move that was long suspected. The company's
wine assets have been a drag on the bottom line in recent years,
plagued by writedowns with an oversupply of grapes and wines from
Australia in the global marketplace, the financial crisis and a
strong Australian dollar making it difficult for Foster's to grow
sales of its premium wines in key markets like the U.S.
Sales of beer in Australia have come under pressure in recent
years as specialist boutique and low-carbohydrate beers have grown
in popularity. In Foster's most recent financial results, the
Carlton and United Breweries beer volumes for Australia declined
5.8%. Management said its beer division was hurt by a "significant
decline" in beer market volume in Australia.
Foster's beer brands include VB, Carlton Draught and low-carb
beer Pure Blonde.
-By Cynthia Koons, Dow Jones Newswires; 61-3-8272-4691;
cynthia.koons@dowjones.com
--Gavin Lower in Melbourne contributed to this report.
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