Foster’s open to ‘sensible’ talks after spurning SABMiller

SYDNEY: Foster’s Group, Australia’s biggest brewer, is open to discussing a “sensible” bid with SABMiller after refusing to enter detailed negotiations on the UK company’s hostile A$9.5 billion ($10 billion) offer. “We are open to conversation with any sensible bid and our shareholders understand that,” Chief Executive Officer John Pollaers said in an interview with Bloomberg Television , without elaborating. “We've had support from our shareholders, in fact all of our shareholders, that it was the right thing.”

Foster's, the world's most profitable independent major brewer , will return at least A$500 million to investors as it resists SABMiller’s bid, which it has rejected as too low. Pollaers on Tuesday announced plans to cut costs by A$55 million and boost earnings at the maker of Australia's Victoria Bitter. “Pollaers is just trying to turn the heat back on SAB,” said Julian Chillingworth, who helps manage £16 billion ($26.4 billion) including SABMiller shares at Rathbone Brothers in London. “We're into the holding pattern in a bid. If I were in SAB's position, I wouldn't force it along too much.

If we have choppy markets , as we do, that plays well for SAB.” An external spokesman for SABMiller, the world's second- biggest brewer by volume, couldn't comment on the CEO's remarks. The maker of Miller Lite and Grolsch took its cash offer directly to Foster's stockholders on Aug. 17 after the Melbourne-based brewer rejected requests for “engagement” more than two months ago. SABMiller may have to raise the offer to A$5.20, according to the median estimate of 13 analysts surveyed by Bloomberg News last week.