Foster's Fights Back Against SABMiller's Hostile Takeover Bid
LONDON -- Australian brewer Foster's has responded to SABMiller's hostile takeover attempt. Foster's said today it will return at least $500 million to its shareholders, perhaps via a share buyback, the New York Times reported.
As CSNews Online previously reported, Foster's is attempting to thwart SABMiller's $9.97 billion hostile takeover bid -- a deal it took directly to the Australian company's shareholders last week. Foster's has consistently said the proposed acquisition price is too low compared to the company's intrinsic value.
The possible share buyback response by Foster's lifted its stock above SABMiller's takeover price, meaning that for Foster's shareholders to approve a deal, it's highly likely SABMiller will need to increase its acquisition offer.
"Given the strength of Foster's balance sheet, the board is…reviewing capital management options with a view of returning cash of at least $500 million to shareholders during the next 12 months," John Pollaers, Foster's chief executive, said in a statement.
Although many might consider Foster's takeover defense shrewd, it was a textbook maneuver, according to a contingent of Citigroup analysts. The newspaper reported that Citigroup analysts said in a research note that the takeover defense strategy "has been revealed and offers few surprises."