Cca Seen As Foster's Suitor
Sydney Morning Herald
Monday May 19, 2008
MACQUARIE Group's broking arm has placed a valuation restriction on Coca-Cola Amatil, fuelling speculation the bank's investment arm is helping the beverage company prepare for a big acquisition.
Although Amatil's chief executive, Terry Davis, last week talked of the potential for his company to buy the Australian beverage side of its competitor Cadbury Schweppes last week, rumours have surfaced that Amatil could even be eyeing the much larger Foster's Group. Mr Davis hinted that Amatil could make a second attempt to buy Schweppes' beverage brands, nine years after the Australian Competition and Consumer Commission blocked Amatil's proposed $1.85 billion acquisition of the brand. "The landscape for beverages has changed dramatically in the last 10 years," Mr Davis said last Thursday. He said increased competition from the Kirin-owned National Foods and Danone in the non-alcoholic beverage market could lead the the regulator reassess its position if Cadbury Schweppes decided to divest its Australian beverage operations, which includes the Pepsi brand in Australia. "You've even got Foster's playing around in beverages. We have a number of companies," he said. In recent documents filed to the Australian Securities and Investments Commission in relation to a restructure to its operations, Cadbury Schweppes valued the share capital of its Australian operations at $2.84 billion. While some believe Mr Davis could be attempting to test the ACCC's position if the Schweppes brand were to come up for sale, there are also suspicions his comments could be a decoy for something much larger. Aside from Foster's shares making a 5.2 per cent rally the day Mr Davis made his comments, Macquarie Equities's valuation restriction sparked suspicions late on Friday that Amatil is working on a deal, possibly in partnership with its joint venture partner SAB Miller. Foster's has a market capitalisation of about $10 billion compared with Amatil's $6 billion, which means Amatil would most likely need a partner even if it launched a scrip-bid. Foster's share price has fallen more than 20 per cent since September.Asked whether it had appointed Macquarie Group as an adviser on a deal, Amatil's head of corporate affairs, Sally Loane, said: "I don't have any comment about that. That's speculation." Australia's other main brewer, Lion Nathan, is effectively takeover proof since it is 46 per cent owned by Japan's Kirin Brewery Company.
© 2008 Sydney Morning Herald