SABMiller’s application rejected

SABMiller’s application rejected

FMCG SUPPLIER NEWS

Business Day - Sep 9th 2011, 08:54

Foster’s rejected SABMiller offer worth A$9,25bn or A$4,7675 per share as too low, company says it is open to discussing a "sensible" bid  

Australia's Takeovers Panel has rejected SABMiller ’s application to review Foster’s statements about earnings forecasts and debt levels amid a A$9,25bn hostile takeover bid.

"The panel concluded there was no reasonable prospect it would make a declaration of unacceptable circumstances," the panel, which arbitrates on acquisition disputes, said in a filing yesterday. "The panel has declined to conduct proceedings."

SABMiller, whose bid Foster’s has rejected as too low, wanted Australia’s biggest brewer to clarify what it called "misleading and deceptive remarks" in an August 23 presentation on earnings forecasts and pro forma debt levels.

Foster’s said yesterday that the debt reflected cash received from winning a tax dispute, payments still to come, an expected reduction of tax paid and the effect on its cash flows. It said: "Foster’s strongly rejected SABMiller’s allegations (and) takes its obligation to provide accurate and timely disclosure to the market seriously."

The brewer said in the presentation the tax refund had a total benefit to it of about A$835m and would give it pro forma net debt of A$887m as of June 30. Revenue in the current year to June would rise at a "mid-single-digit" pace with earnings before interest and tax to rise faster than sales.

SABMiller’s offer is worth A$9,25bn, or A$4,7675 per share. Foster’s has said it is open to discussing a "sensible" bid.

"SABMiller accepts the panel’s determination and is pleased Foster’s has now clarified its debt position," Lauren Thompson of SABMiller’s media adviser, FTI Consulting , said yesterday.

The Australian newspaper said Foster’s chairman David Crawford would count the decision as a minor win but SABMiller CEO Graham Mackay probably see it as a draw.