SABMiller talks to banks to launch fresh assault on Foster's
13 Aug 2011
Global brewing and bottling giant SABMiller is assembling funds to launch a fresh assault on Australia's largest brewer, Foster's, which had rejected its earlier $10-billion (A$9.5 billion) unsolicited takeover bid in June, this year.
Of South African origin and London Stock Exchange-listed SABMiller is in talks with a consortium of banks for a multi-billion dollar syndicated loan to fund its proposed takeover of the Melbourne-based brewer, which would be among the biggest acquisition this year, Reuters yesterday reported, citing unidentified banking sources.
However, several other media reports speculated that SABMiller is in talks with banking advisers JP Morgan, Royal Bank of Scotland and Morgan Stanley for the syndicated loan.
While making its $10-billion cash bid, which was rejected by Foster's as being too low (See: Foster's rejects SABMiller's $10-bn bid), SABMiller, the world's second-biggest brewer by volume after Belgium's Busch InBev NV had said that it would fund the acquisition with new debt and and an existing $2.5-billion loan.
The timing for a renewed assault will come soon as Foster's is scheduled to declare its full year results on 16 August, which are likely to be weak, in line with its local rival Lion Nathan that reported an 11-per cent fall in first-half profits at its alcoholic drinks division.
Last week, Fosters's share price dropped to A$4.79 compared to SABMiller's offer of A$4.90 per share, which was a premium of 8.2 per cent to Foster's closing price of A$4.53 on 20 June, the day the offer was made.
