Global brewer SABMiller has taken its $10-billion bid direct to Foster's Group shareholders, days before Foster's announces its annual results, having failed to win over the Australian company's board.
The cash offer at $A4.9 a Foster's share was similar to SABMiller's first approach back in June, though the London-based brewer said the offer would be reduced by any dividend paid by Foster's in the future, with analysts forecasting a 15 cent second half dividend to be announced next week.
Foster's third-largest shareholder saw SABMiller's move on Wednesday as a way to get the ball rolling on a deal after Foster's refused talks, and was not surprised SABMiller came back at A$4.9 since that was the price it initially proposed.
"As a shareholder, the move is welcome in that it'll get the parties engaged," said Matthew Williams, equities manager at Perpetual Investments, which holds 4.7% in Foster's.
Foster's shares closed up 0.6% at A$5.0 in Sydney on Wednesday, ahead of the A$4.9 bid price. SABMiller shares were down 0.6% at £21.1 in London.
Under Australian rules, SABMiller has two months to submit a formal bid.
Foster's declined to comment on Wednesday.
SABMiller has its financing in place and is ready to go ahead with its bid and not wait for Foster's annual results on August 23, which are expected to show a drop in beer profits, said analysts.
The cash deal values Foster's at A$9.5 billion ($10 billion) before debt, but taking debt into account the enterprise value of the bid is A$11.2 billion ($11.7 billion).
A deal would join together the brewer of Miller Lite, Peroni and Grolsch with the Melbourne-based maker of Victoria Bitter, Pure Blonde and Cascade beer, and would be the biggest brewing deal since InBev paid $52 billion to buy Anheuser-Busch to form AB InBev in the world's biggest cash takeover in 2008.