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http://www.lawyers.com.au/legal-articles/2011/2/24/fosters-looks-a-little-too-pricey-says-amatil-boss/

Foster's looks a little too pricey, says Amatil boss

Sydney Morning Herald

Thursday February 24, 2011

Eli Greenblat

THE managing director of Coca-Cola Amatil, Terry Davis, has again played down the likelihood of a billion-dollar grab for the brewing operations of Foster's but has refused to confirm or deny speculation that his brewing partner SABMiller was manoeuvring to make a bid for the maker of VB and Carlton Draught.Speaking yesterday after Coca-Cola Amatil posted a 10.8 per cent rise in full-year net profit to $497.3 million on flat sales, Mr Davis said at Foster's present share price of about $5.60 it was an expensive option and did not make sense for Coca-Cola Amatil."We have been so heavily focused on organic growth, why would we bet the farm for a business that hasn't performed as well over the last three or four years?"Brewers such as Foster's have suffered a long-term downward trend in beer consumption in Australia with once-flagship labels losing market share to rival domestic beers and premium overseas labels.Pacific Beverages, Coca-Cola Amatil's joint venture with the international brewer SABMiller, has exposure to the growing segment of the beer market - premium beers - and produces the popular brands Peroni, Blue Tongue and Grolsch.Yesterday the joint venture recorded its maiden profit since its formation in 2006 - $1.5 million for the 12 months to December 31 against a loss of $2.3 million in 2009.BusinessDay reported this week that SABMiller had spent the past few months working with lawyers to sort out legal and commercial issues relating to its joint venture with Coca-Cola Amatil which had prevented it making a lone bid for Foster's.Mr Davis would not be drawn on the speculation. "Anything we do in alcohol in Australia we have to present to SABMiller, and anything that they do in alcohol they have to present to us. So this is no different to what I have said [previously]". But he would not respond to questions about whether SABMiller was seeking to alter that arrangement.

© 2011 Sydney Morning Herald

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