SABMiller Bid for Foster's Turns Hostile

By CYNTHIA KOONS SYDNEY—SABMiller PLC's 9.51 billion Australian dollar (US9.97 billion) bid for Australian brewer Foster's Group Ltd. turned hostile Wednesday when the global brewing giant made a conditional, off-market cash offer to shareholders at the same price that Foster's board rejected in June. SABMiller—the <a href="http://www.couponcatch.net/ "><strong>coupon savings </strong></a> world's second-biggest brewer by volume after Anheuser-Busch InBev NV—is offering A4.90 a share for Australia's largest brewer, below Foster's last traded price of A4.96. SABMiller said failed attempts to engage with Foster's board regarding its initial bid have left the suitor with no choice but to take the offer straight to Foster's shareholders. A Foster's spokesman said the company didn't have a comment at this stage. It's the largest offer for a brewer since Heineken bought Mexican brewer Femsa early last year and follows a trend of global consolidation in the beer industry. "SABMiller believes that the proposal put to the Foster's board is attractive and should be put to Foster's shareholders," the company said in a statement. "As there has been no willingness to engage in relation to SABMiller's proposal on the part of the Foster's board, SABMiller has decided to make an offer to Foster's shareholders directly." A person familiar with situation said SABMiller had made "numerous attempts" to engage with the Foster's board but had been unsuccessful. SABMiller decided to approach shareholders now in part because the company had lined up the financing for the bid, the person said. "They're quite a determined bunch, those guys at SABMiller," <a href="http://www.couponcatch.net/ "><strong>print coupon </strong></a> said Altium Securities analyst Greg Feehely, who added that he wasn't surprised by the move. "They've got quite a track record of buying things around the world." "It's a tough old business, global brewing. Scale is everything. Standing still isn't massively an option," he added. Mr. Feehely couldn't say whether SABMiller's <a href="http://www.couponcatch.net/ "><strong>free online coupons </strong></a> offer would be accepted by Foster's shareholders, but he noted it was "very rare" based on previous deals that a sale is struck at an initial price. Geoff Driver, general manager of Foster's investor Australian Foundation Investment Co., said the fund manager isn't in a hurry to respond to the offer. "We'll sit back and see what's said and make an assessment from there," he said. The beer maker's shares shot up after SABMiller made its initial approach on June 21. They have drifted down from those higher levels, though its shares have largely traded above the initial offer price. Foster's has long been viewed as an attractive takeover target due to its leading position in Australia's beer market, leading to speculation that the company could attract multiple bidders. The speculation intensified earlier this year when Foster's split off its wine business, which has struggled in recently years and had been seen as a hurdle to a takeover approach, into a separately listed company. Still, no other suitors have gone public. Sales of beer in Australia have come under pressure in recent years however, as specialist boutique and low-carbohydrate beers have grown in popularity. In Foster's most recent <a href="http://www.xinzhouba.com/view.php?id=17065"><strong>Swiss Watches Blog Replica Cartier 21 Must De Cartier Ladies Watch ...</strong></a> financial results, Foster's Carlton and United Breweries' beer volumes for Australia declined 5.8%. Management said its beer division was hurt by a "significant decline" in beer market volume in Australia. Foster's is due to report full-year financial results next week. SABMiller said the deal would be funded through a combination of existing resources and new debt. The offer is subject to 90% shareholder approval. Write to Cynthia Koons at cynthia.koons@wsj.com