Foster’s Rejects $2.5 Billion Bid for Wine Business
After considering the value range in the proposal, the Board of Foster’s continues to consider that a separation of the Wine business from the Beer business through a demerger is most likely to represent the best outcome for all Foster’s shareholders.
Sep 8 2010 --- The Board of Directors of Foster’s Group Limited (Foster’s) has received an unsolicited expression of interest from an international private equity firm to acquire the wine assets of Treasury Wine Estates. The indicative, non-binding proposal involves a cash consideration of between $2.3billion and $2.7billion for 100% of the assets.
After considering the value range in the proposal, the Board of Foster’s continues to consider that a separation of the Wine business from the Beer business through a demerger is most likely to represent the best outcome for all Foster’s shareholders. In addition, the high level of conditionality, the requirement for exclusivity and other terms of the proposal are considered to reduce the value and certainty of the proposal.
The unexpected bid for the world's second-largest wine business pushed Foster's shares up 6 percent on hopes of better offers for wine, or that suitors for the beer unit will now step forward. The combined group has a market value of about $11 billion.
Treasury Wine Estates is a leading global wine business with a unique portfolio of premium global brands. The business is making significant progress in implementing its transformation programme. The Board of Foster’s believes that Treasury Wine Estates is well positioned to grow over the coming years and thereby create additional value for Foster’s shareholders. The Board considers the indicative proposed value range, referred to above, significantly undervalues Treasury Wine Estates and its future prospects.
Foster’s says it remains committed to the evaluation of issues, costs and benefits of a potential demerger, with work continuing to progress to schedule. However, the Board will continue to consider any proposal that is in the best interests of shareholders.
