Molson Coors declares 5% stake in Foster’s, takeover speculation mounts

Posted by Daniel Palmer on 6th November 2008

Natural Beer

Molson Coors has been identified as the mystery stakeholder in Australia’s largest brewer, Foster’s, strengthening speculation of a takeover.

Deutsche Bank bought a 5.26% stake in Foster’s on behalf of a previously unidentified client on September 25, while rumours circulated that the stake could be an indication of a possible takeover bid in the near future.

Molson Coors, which has operations in the US, Canada and the UK, made the announcement overnight when presenting their third quarter results but refused to be drawn on the implications of the stake.

“This (Australia) is an interesting market we’ve been studying for some time, and we viewed this as an attractive opportunity,” Molson Coors President and CEO Peter Swinburn said. “Foster’s operates in a profitable market. The exposure was available to us as an attractive price and it represents a prudent and appropriate level of exposure…. But I would caution that we could take the view that we keep, we stay where we are, we might move forward or we might move backwards and out, so whatever we do will be in the best interests of our shareholders.”

Mr Swinburn added that their company was not planning to get involved in the spirits and wine categories which Foster’s is currently involved in, suggesting that a takeover may be more likely if Foster’s instigates a demerger of their wine and beer businesses following the completion of their wine review.

Foster’s has reported they are unaware of any plans of Molson Coors having only just learnt of the company behind the substantial shareholding.

“Foster’s has not been informed of the precise extent of Molson Coors’ interest in the Company nor their intentions with respect to that interest,” a statement advised.