July 29 (Bloomberg) -- Foster’s Group Ltd., which rejected a takeover from SABMiller Plc, won’t rule out talks with its rival even as no discussions have been held since the A$9.5 billion ($10.4 billion) bid was rejected last month.
“We are not saying we would never engage,” Foster’s Chief Executive Officer John Pollaers said in Melbourne today. “The value put on the table there was just so far away from reality, it wasn’t worth engaging.”
SABMiller hasn’t returned with a higher bid since its A$4.90 a share cash bid was rejected on June 21 and the London-based company said it would “seek engagement” with Foster’s. Pollaers, who has run the Melbourne-based brewer since it spun off its wine unit in May, said the company’s market share has stabilized at about 50 percent and Australian consumption may return to “modest” long-term growth after natural disasters curbed demand.
“We have a strong plan we have confidence in and we are already executing it,” Pollaers said. “We have spoken to our shareholders and they are saying it is the right plan and we are doing the right thing.”
Foster’s rose 1.4 percent, the biggest one-day gain since disclosing the bid on June 21, to A$5.05 at the 4:10 p.m. close in Sydney.
Beth Longcroft, a spokeswoman for SABMiller, declined to comment on Pollaers’ remarks.
SABMiller could afford to pay more for Foster’s, according to analysts surveyed by Bloomberg News, even though an acquisition would dilute the brewer’s exposure to faster-growing emerging markets. Any purchase would give SABMiller Australia’s top-selling beer as well as a business with some of the highest margins around the world.
Pollaers is concentrating on stemming market-share losses and cutting production costs to free up cash and boost promotion of brands. He’s also developing new brews to win back consumers who switched to sweeter pre-mixed drinks and craft beers.
The company said July 19 it may buy back shares or boost dividends after winning a dispute with the Australian Commissioner of Taxation that will see it get about A$390 million in cash refunds and interest.
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