E-Malt.com News article: Australia: Rumours and speculations on Foster’s takeover resurge

Foster’s is again the centre of takeover rumours after shares in Australia's largest wine and beer producer surged to a new high. Rumours gripped the market September 15 that a list of buyers, including one of the world's richest men, the 60-year-old Sultan of Brunei, could be planning a $14 billion-plus bid for Foster's (figures in AU$ unless stated), The Sydney Morning Herald posted September 16.

This comes on top of speculation the world's top two brewers, InBev and SABMiller, are looking at the beverage group.

Shares in Foster's surged 52c to US$6.85 in heavy trade partly on talk Macquarie Equities was snapping up shares on behalf of the Brunei Investment Agency. There were also suggestions private equity firms such as Catalyst could be interested. But with some market watchers perplexed by the notion of a ruler of an Islamic country taking an interest in a beer and wine maker, Foster's shares eased to close 12c higher at $6.45.

The idea of Sultan Hassanal Bolkiah buying Foster's might also be frowned on in the South-East Asian nation of 380,000, where public alcohol consumption is banned.

As the day progressed, Macquarie - of which the Sultan was once a major shareholder - was not as active as other brokers in trading Foster's stock.

Asked about the rumour, a spokeswoman for the Brunei Investment Agency said: "I'm not familiar with that." She could not answer whether it was allowable for the agency to invest in beer.

Shares in the company are still up 20 per cent on the month, largely thanks to persistent rumours it could be taken over. Foster's declined to comment.

"We have nothing to update following our statement on August 30 to the stock exchange," Foster's spokesman Troy Hey said.

In the statement, Foster's said it was "not aware of any proposals which may lead to a takeover" but the company had prepared a takeover defence strategy. The surge in Foster's was also accompanied by a strong rise - and some large trades - in McGuigan Simeon stock.

Shares in Australia's second largest listed winemaker rose 19c, or 9.6 per cent, to $2.17 in their heaviest day of trading since the company's founder, Brian McGuigan, sold his 7.5 per cent stake in February. Around 3 per cent of the stock changed hands with several large trades towards the close of business.

Shares in the company have slumped more than 60 per cent in the past year due to the wine glut.

McGuigan's recent full-year loss and write-down of its wine stock did not help matters. To drum home the negative outlook, the company's newly appointed managing director, Dane Hudson, warned that the wine glut could continue until 2009.

But McGuigan's strong market position, relatively robust balance sheet and depleted share price could also spark the interest of a potential buyer.


16 September, 2006