Foster’s to return money to shareholders
In its latest move to fend off a takeover bid by multinational brewer SABMiller, Australian brewing giant Foster’s Group Limited plans to return A$500 million to its shareholders through a share buyback or capital reduction.
As well as announcing the buyback bid, Foster’s today released its full year results which show an 8.7 per cent fall in profit and a net loss of A$89 million for the year to June 30 2011.
A strong credit profile and proceeds from the Ashwick tax case have led the Foster’s Board to pursue capital management options for the return of “at least A$500 million” to shareholders.
Foster’s Group CEO John Pollaers said, “As a result of the proposed takeover offer for all of the shares in Foster’s by SABMiller, the Board of Foster’s has suspended the company’s Dividend Reinvestment Plan.
“Options being considered include a capital reduction, which involves seeking a tax ruling from the Australian Taxation Office (ATO) and the approval of shareholders, and an on-market share buy back.”
In its full year report, the Board of Foster’s reiterated its belief that an offer price of A$4.90 per share from SABMiller “significantly undervalues the company in the context of a change of control.”