Southcorp proposes merger with Foster's
The merger proposal comes as an alternative to a hostile takeover by the brewer.
08/03/05 Australian winemaker Southcorp has proposed a merger with global brewing giant Fosters, as an alternative to a hostile takeover. Southcorp, whose brands include Penfolds, Rosemount Estate and Lindemans, has urged shareholders to reject a 3.1 billion Australian dollar (US$2.5 billion; euro1.89 billion) takeover bid by Foster's Group Ltd., saying it does not adequately reflect the value of the company. Southcorp released an Independent Expert's Report, which assessed the value of Southcorp in a range from $4.57 and $4.80 per share.
Under the merger proposal, Southcorp would remain a stand-alone business and Foster's would gain a controlling stake of between 57 percent and 60 percent. Fosters currently holds an 18.8 percent stake in the winemaker.
In a letter to Foster's Chairman Frank Swan, Southcorp Chairman Brian Finn called the proposed merger "a constructive alternative" to the ongoing stalemate between the two companies.
Under the proposed deal, Finn said: "We would both have created an Australian company that would have a leading international position in the world of wine, and in which both Foster's and Southcorp shareholders would participate."
