Australia's largest brewer said it would buy Beringer for $55.75 a share in cash, valuing the California wine maker at $1.15 billion. The offer represents a 24 percent premium to Beringer's closing price on Monday. The maker of Foster's Lager also said it would assume about $320 million of Beringer debt and raise as much as $800 million through debt and equity to pay for the transaction.
The acquisition, Foster's biggest ever, "gives it a good footprint in the U.S. and a reasonable distribution," said Don Hamson, investment director at Westpac Investment Management. "Beer is a low-growth area, so the expansion into wine is strategically a good move. The question still remains if they've paid the right price." Foster's said about 55 percent of Beringer's shareholders, including Fort Worth-based Texas Pacific Group, as well as Beringer's directors and senior managers accepted its offer. Foster's shares fell 5 cents to $4.40 Australian in trading Monday. The Class B shares of Beringer rose $1.56 to $45.06 in Nasdaq trading. The shares have climbed 13 percent this year.
Foster's said its shares will be suspended from trading Tuesday and resume Wednesday after it completes its equity offering.