Australian brewer Foster’s Group sought to put pressure on SABMiller to up its $10-billion hostile takeover offer, unveiling on Tuesday a $521-million capital return even as profits slid.
Australia’s largest brewer proposed to return money to shareholders via a share buyback or capital reduction in an effort to get SABMiller to increase its Australian dollar (A)$4.9 a share offer, which Foster’s has twice rejected as too low.
“It is probably one of the few options that they have, so it’s not unexpected that they’re doing that,” said Theo Maas, portfolio manager, Arnhem Investment Management which does not own Foster’s shares.
The market appeared to agree, with shares in Foster's showing a muted response to the news, rising 1.8% to A$5.0, lagging a 2.2% gain in the broader market.