Global brewing and bottling giant SABMiller has taken its $10-billion (A$9.5 billion) takeover bid for Foster's Group directly to shareholders after Australia's largest brewer rejected its bid as being too low.
The board of Foster's had in June rejected SABMiller's initial 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. (See: Foster's rejects SABMiller's $10-bn bid)
The London and Johannesburg-listed brewer today said it would make a conditional, off-market, cash takeover offer of $4.90 per share, less the amount of any dividend or distribution paid or declared by Foster's after today.
The board of Melbourne-based Foster's has shown ''no willingness to engage,'' and "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," SABMiller said in a statement.
The offer is conditional on SABMiller receiving acceptances from 90 per cent of Foster's shareholders, which would then make it mandatory to acquire the remaining 10 per cent under Australian corporate law.
Taking the bid to Foster's shareholders has come as no surprise as SABMiller was in talks last week with a consortium of banks for a multi-billion dollar syndicated loan to fund its proposed takeover of Foster's, which would be among the biggest acquisition this year. (See: SABMiller talks to banks to launch fresh assault on Foster's)
While making its $10-billion cash 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 an existing $2.5-billion loan.
SABMiller appears to have tied up the syndicated loan from JP Morgan, Royal Bank of Scotland and Morgan Stanley as it today said that it will fund the deal through a combination of existing resources and new debt committed by a number of financial institutions.
Founded in 1895 in Johannesburg as South African Breweries, the company changed its name in 2002 to SABMiller following the merger with North America's Miller Brewing Company.
With beer brands such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft, Grolsch, Aguila, Castle, Miller Lite, Snow, and Tyskie, SABMiller reported revenues of $26.3 billion and adjusted pre-tax profit of $3.8 billion for the year ended 31 March 2010.
SABMiller is also one of the world's largest bottlers of Coca-Cola products and the second-largest brewer in India. SABMiller owns the rights to Foster's beer brand in the US and India.
Foster's, has been a subject of takeover speculation sinc e it announced details to split its struggling wine division from its profit-making beer unit into two separate listed companies in February 2011. (See: Foster's to split wine and beer divisions into separate listed companies)
Foster's, maker of the well-known eponymous beer brand with a market capitalisation of $9 billion, first flagged the restructuring of its business in February 2009 after its failed attempt to sell it.
(See: Foster's once again rejects SABMiller bid)