SABMiller goes hostile with £6bn Foster’s bid

GLOBAL brewer SABMiller went hostile with its A$10 billion (£6.1bn) bid for Australia’s Foster’s Group yesterday, but without raising its friendly offer unveiled in June.

SABMiller, which is offering an unchanged A$4.90 a share, said in a statement: “SABMiller believes that the proposal put to the Foster’s board is attractive and should be put to Foster’s shareholders.

“As there has been no willingness to engage in relation to SABMiller’s proposal on the part of the Foster’s board, SABMiller has decided to make an offer to Foster’s shareholders directly.”

However, the offer price is currently lower than the Aussie brewer’s market price, the stock closing yesterday at A$4.96.

Paul Xiradis, chief executive at Australian fund manager Ausbil Dexia, said: “I don’t think the offer on the table is fair value. Foster’s is a prized asset with strong cash flow and at probably the low point of its earnings cycle. For an iconic business, that sort of offer is undercooking it.”

However, Matthew Williams, Australian equities manager at Perpetual Investments, which owns nearly 5 per cent of Foster’s, said the latest move by SABMiller was welcome “in that it will get the parties engaged”.

SABMiller is known for brands such as Peroni and Grolsch lagers. The group’s new Miller Genuine Draft lager was launched in England and Wales last month, previously having only been available on the British mainland in Scotland.

Foster’s is Australia’s biggest brewer with seven of the top ten beer brands and a national distribution network.

The company attracted takeover interest after it demerged its under-performing wine business into a separately listed company last May. However, no white knight bidders have so far appeared as rivals to SABMiller.