SABMiller in hostile bid for Foster’s

SABMILLER yesterday went hostile in its bid for Foster’s after the brewer’s board rejected a £6.1bn offer and flatly refused to enter negotiations.

The owner of brands including Peroni and Grolsch has not raised its offer but is directly approaching shareholders to convince them to back a deal.

Foster’s immediately rejected SABMiller’s offer in June, and chief executive John Pollaers said the offer was so low it was not worth discussing.

He recently came under fire from some shareholders for failing to engage with SABMiller.

Yesterday Australia’s Perpetual Investments, which has a 4.7 per cent stake in Foster’s, welcomed the direct approach.

Matthew Williams, Australian equities manager at the company said: “As a shareholder, the move is welcome in that it’ll get the parties engaged. The ball is in play.”

A deal would join together the brewer of Miller Lite, Peroni and Becks with the Melbourne-based maker of Victoria Bitter, Pure Blonde and Cascade beer, and would be the biggest brewing deal since InBev paid $52bn (£31.5bn) to buy Anheuser-Busch to form AB InBev in the world’s biggest cash takeover in 2008.

SABMiller is convinced its offer for Foster’s is fair given tough market conditions. But some analysts says Foster’s may look to launch a share buyback or pay a special dividend in order to thwart SABMiller, and some shareholders said this was a possibility.

•Rival Carlsberg yesterday cut its full-year outlook when reporting a 13 per cent fall in quarterly profit that missed forecasts, after sales in its key Russian market were hit by higher prices.

THE CONSOLIDATION OF THE BREWING INDUSTRY

● Bought Tuborg breweries in 1970 and merged with Tetley in 1992.
● Runs Baltic Beverages, a key player in the Russian market
● Acquired control of Poland’s Okocim Group in 2004
● Bought Scottish and Newcastle for £8bn in 2007 with Heineken.
● Formed by the takeover of Anheuser-Busch – the largest brewer in the US – by rival InBev in 2008.
● Best known brands include Budweiser, Michelob and Stella.
● One of the world's top five consumer products companies
● Founded in 1864
● Merged with competitor Amstel in 1968
● Part acquisition of Scottish and Newcastle made it the second largest brewer on revenues
● Bought the brewery division of Mexican giant FEMSA in 2010.
● Founded in 1895 as South African Breweries (SAB)
● Began investing in Europe in 1990 and listed in London in 1999.
● Bought Miller in 2002 to become SABMiller.
● Bought major interest in Bavaria SA in 2005
● Launched hostile bif for Foster’s yesterday.

ADVISER: JP MORGAN

JOHN MUNCEY

JOHN Muncey is leading the JP Morgan team working on SABMiller’s bid for Foster’s.

He is head of the consumer corporate finance team at the bank, where he has worked for four years.

Muncey has a vast array of experience in the consumer sector, having previously worked at UBS where he was a managing director of the European consumer team.

His list of clients included Diageo, the drinks company; Scottish & Newcastle, the UK’s biggest brew er and Kraft, the US food group; and Tchibo Holding of Germany

Prior to joining UBS, he was with Hill Samuel for eight years.

He is seen as a pivotal player, bringing in new, heavyweight clients involved in M&A activity.

A syndicated loan of more than $9bn has been secured, according to banking sources.

Other advisers on the deal include Moelis, RBS and Morgan Stanley with teams working round the clock to bring the deal to a close.

The advisory team was put in place last week as SABMiller plotted its latest move.

It was a surprise as analysts expected it to wait until Foster’s results next week. Much of the activity is based around Australia, the home of Foster’s.