FOSTER’S CALLS TAKEOVER RUMORS HEARSAY
Foster’s Group has denied any knowledge of a rumored takeover bid by InBev or SABMiller. After shares in Foster’s rose 9% yesterday, Foster’s told the Australian Stock Exchange that it knew nothing of any rumored interest in the company after being asked to explain a jump in its share price. According to the company, the only explanation for the jump is the release of its annual results yesterday in which the company posted a 27% increase in full-year profits.
Apparently, things are just dandy. "Looking forward, we remain confident of achieving all of the financial targets we put in place at the time of the Southcorp integration," Foster's Chief Executive Trevor O'Hoy said in a statement.
So was it just a big misunderstanding? Troy Hey, Manager of External Communications in Australia, told WSD that “the takeover rumors came out of a single article in the Sydney Morning Herald on the morning of the results announcement.”
In a response to the Australian Stock Exchange, Foster’s wrote: “The company is not aware of any proposals which may lead to a takeover and no approaches to that end have been made to the company.” Since making that announcement, Foster’s share has gone down as much as 3% according to Reuters.
While WSD will be on the lookout for any new revelations, it appears that for now the rumors have little to show in the way of truth. Many industry analysts consider the chances of an offer from SABMiller or InBev low, but do not completely rule out the possibility. Both companies have not shown any particular interest in wine, and the Australian beer market is pretty small on a global basis – too small, perhaps, to attract much attention from the big boys. At the same time, however, SABMiller already owns the Foster’s brand license in the U.S. and bough Foster’s India business not too long ago. We’re also not ruling out the possibility of interest from Anheuser-Busch who could be eager to get into the wine business sometime in the future.
Another possibility could involve Foster’s selling its wine business which is currently battling the grape glut and fierce competition, particularly in Europe. Companies like Constellation, Diageo or Pernod probably wouldn’t mind adding the Foster’s portfolio to their own wine business – if the watchdogs would allow it. The fact that Foster’s has already integrated its wine and beer business, however, would make it a much more complicated scenario.
Apparently, things are just dandy. "Looking forward, we remain confident of achieving all of the financial targets we put in place at the time of the Southcorp integration," Foster's Chief Executive Trevor O'Hoy said in a statement.
So was it just a big misunderstanding? Troy Hey, Manager of External Communications in Australia, told WSD that “the takeover rumors came out of a single article in the Sydney Morning Herald on the morning of the results announcement.”
In a response to the Australian Stock Exchange, Foster’s wrote: “The company is not aware of any proposals which may lead to a takeover and no approaches to that end have been made to the company.” Since making that announcement, Foster’s share has gone down as much as 3% according to Reuters.
While WSD will be on the lookout for any new revelations, it appears that for now the rumors have little to show in the way of truth. Many industry analysts consider the chances of an offer from SABMiller or InBev low, but do not completely rule out the possibility. Both companies have not shown any particular interest in wine, and the Australian beer market is pretty small on a global basis – too small, perhaps, to attract much attention from the big boys. At the same time, however, SABMiller already owns the Foster’s brand license in the U.S. and bough Foster’s India business not too long ago. We’re also not ruling out the possibility of interest from Anheuser-Busch who could be eager to get into the wine business sometime in the future.
Another possibility could involve Foster’s selling its wine business which is currently battling the grape glut and fierce competition, particularly in Europe. Companies like Constellation, Diageo or Pernod probably wouldn’t mind adding the Foster’s portfolio to their own wine business – if the watchdogs would allow it. The fact that Foster’s has already integrated its wine and beer business, however, would make it a much more complicated scenario.
posted at 1:46 PM
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