FGL - Fosters Group
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Garpal Gumnut
Ross Island Hotel
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Thanks Dutchy,
I'm thinking of selling into a recently announced buyback , so the price may increase after that.
Garpal
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What are you expecting to get out of this one Dutchy? All time highs, recent highs?
I am watching it.
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It appears to be pushing up slowly but is pushing up.
How does the change of chairman affect the company fundamentally just out of interest? The market seems to be ok with it.
Disclosure: I now hold.
How does the change of chairman affect the company fundamentally just out of interest? The market seems to be ok with it.
Disclosure: I now hold.
Hey ASF'ers
Fosters smashed today.. down 5.6%.. that just stuns me.. I mean, yes it was a shocker for the ASX (Down 2.5%) but double the board is amazing..
Although, it is extremely tempting to pocket a few more at this price (5.88).. Might just sit tight for a while and let some of the madness play out, but on the flip side would hate to miss a bargain.. Ahh well, let's just see what happens..
Regards,
Buster
Fosters smashed today.. down 5.6%.. that just stuns me.. I mean, yes it was a shocker for the ASX (Down 2.5%) but double the board is amazing..
Although, it is extremely tempting to pocket a few more at this price (5.88).. Might just sit tight for a while and let some of the madness play out, but on the flip side would hate to miss a bargain.. Ahh well, let's just see what happens..
Regards,
Buster
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With Trevor Hoy gone, could we see a change in management? The SP isn't doing anything at the moment (sideways?) but since I'm looking at long term stocks I wonder if the following may make it attractive:
Interested to hear how others are viewing FGL.
- probable change to management team
- long term US dollar strengthening
- attractive for a takeover - not sure on this - have yet to check the numbers
Interested to hear how others are viewing FGL.
Not sure if any are interested but this is what I got out of a chat with the people at Fosters today ...
Undertaking a broad-ranging strategic review – nominally of its wine business, but likely to encompass the appropriateness of the Group’s multi-beverage structure as well.
Timing of internal decisions is clearly the end of CY08 due to:
1.Need to appoint a new CEO and have them “buy in” to any decision. Clear preference is for experienced international beverages industry exec, or failing that an FMCG background.
2.Board renewal continues under new Chairman (I suspect they have seen Crawford more in 6 months then they did in Swann in 6 years) , with a new man joining in March and NAB Deputy CEO Michael Ullmer appointed this morning. Likely to see another long-standing Director retire and be replaced at 2008 AGM. By end of CY08 half the Board should have direct beverages industry management experience. A far more robust discussion and decision-making process should ensue.
3.Complexity of wine industry means FGL faces difficult decisions about its brand portfolio, go-to-market strategy, asset/working capital intensity and product sourcing mix.
4.Beer business is also a candidate for a fresh cost reduction initiative. Any demerger would impact the sales force structure (net positive?), but not necessarily distribution costs (could be kept via JV).
I see limited downside from here (say 10% discount to $5.05 stand-alone SOTP) vs upside to mid-$6s in a takeover BUT:
·Absent an unsolicited bid, the stock is arguably dead money for 3-6 months.
·Wine earnings are still deteriorating given strong A$ & excess inventory position after the surprisingly large 2008 harvest.
·Wine review to deliver lift in returns over medium term but no obvious “quick fix”.
For event traders, look to pick up stock in weakness – say mid-$4s.
Undertaking a broad-ranging strategic review – nominally of its wine business, but likely to encompass the appropriateness of the Group’s multi-beverage structure as well.
Timing of internal decisions is clearly the end of CY08 due to:
1.Need to appoint a new CEO and have them “buy in” to any decision. Clear preference is for experienced international beverages industry exec, or failing that an FMCG background.
2.Board renewal continues under new Chairman (I suspect they have seen Crawford more in 6 months then they did in Swann in 6 years) , with a new man joining in March and NAB Deputy CEO Michael Ullmer appointed this morning. Likely to see another long-standing Director retire and be replaced at 2008 AGM. By end of CY08 half the Board should have direct beverages industry management experience. A far more robust discussion and decision-making process should ensue.
3.Complexity of wine industry means FGL faces difficult decisions about its brand portfolio, go-to-market strategy, asset/working capital intensity and product sourcing mix.
4.Beer business is also a candidate for a fresh cost reduction initiative. Any demerger would impact the sales force structure (net positive?), but not necessarily distribution costs (could be kept via JV).
I see limited downside from here (say 10% discount to $5.05 stand-alone SOTP) vs upside to mid-$6s in a takeover BUT:
·Absent an unsolicited bid, the stock is arguably dead money for 3-6 months.
·Wine earnings are still deteriorating given strong A$ & excess inventory position after the surprisingly large 2008 harvest.
·Wine review to deliver lift in returns over medium term but no obvious “quick fix”.
For event traders, look to pick up stock in weakness – say mid-$4s.
Sean K
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Sean K
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Just broken up through neck line. Just.
Looks like it's Molson makng a play.
Wonder how much takeover spec is already factored in, and how much further it could go? Maybe a bidding war? Hmmmmm
American brewing giant buys a slice of Foster's but stays cagey about plans
Ari Sharp
November 7, 2008
NORTH American brewing giant Molson Coors has been revealed as the owner of a chunk of Australian drinks maker Foster's Group, but the company has declined to say what its plans are for its 5% stake.
But any play for Foster's will involve splitting off the company's wine business, said Peter Swinburn, chief executive of Molson Coors Brewing.
"This (Australia) is an interesting market we've been studying for some time and we viewed this as an attractive opportunity."
Garpal Gumnut
Ross Island Hotel
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Just broken up through neck line. Just.
Looks like it's Molson makng a play.
Wonder how much takeover spec is already factored in, and how much further it could go? Maybe a bidding war? Hmmmmm
American brewing giant buys a slice of Foster's but stays cagey about plans
Ari Sharp
November 7, 2008
NORTH American brewing giant Molson Coors has been revealed as the owner of a chunk of Australian drinks maker Foster's Group, but the company has declined to say what its plans are for its 5% stake.
But any play for Foster's will involve splitting off the company's wine business, said Peter Swinburn, chief executive of Molson Coors Brewing.
"This (Australia) is an interesting market we've been studying for some time and we viewed this as an attractive opportunity."
I've held on to FGL through a few reasonable ff buybacks so I'm keen on a takeover.
These jokers ruined a good company going into wine.
Anywhere north of $7 on a takeover and I'm well ahead of not taking the previous offerings.
gg
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There is a question mark over Foster's arrangements to distribute Asahi now that the Japanese giant is entering Australia via its Schweppes acquisition. Could we be seeing another beer competitor emerging domestically?
More here: http://internationalbs.wordpress.com/2008/12/29/more-action-brewing/
More here: http://internationalbs.wordpress.com/2008/12/29/more-action-brewing/
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More on the manoeuvers in the industry: http://internationalbs.wordpress.com/2009/01/05/whose-shout-is-it-again/
More talk surrounding a tie-up with Asahi floating around..
As well as a couple of buy recommendations just slapped on. Have always thought the drag from Wine business is a little over played. Sure it's makes a poor ROI, sure they paid too much at the wrong point in the cycle, but eventually they'll have written most of that loss down.. A lot of smaller wine players will be forced out during this crisis, giving Fosters plenty of room to move.
http://business.theage.com.au/busin...ers-lifts-investor-spirits-20090714-djgp.html
As well as a couple of buy recommendations just slapped on. Have always thought the drag from Wine business is a little over played. Sure it's makes a poor ROI, sure they paid too much at the wrong point in the cycle, but eventually they'll have written most of that loss down.. A lot of smaller wine players will be forced out during this crisis, giving Fosters plenty of room to move.
http://business.theage.com.au/busin...ers-lifts-investor-spirits-20090714-djgp.html
Asahi recently bought out Schweppes and I believe they have bigger plans.
Asahi will want to stamp it's foot firmly on the Aus market, I think Fosters is the obvious target.
Rumors around that Suntory/Kirin merger is on the cards, if this does eventuate Asahi will have even more reason to start picking up targets.
My
.
Asahi will want to stamp it's foot firmly on the Aus market, I think Fosters is the obvious target.
Rumors around that Suntory/Kirin merger is on the cards, if this does eventuate Asahi will have even more reason to start picking up targets.
My
.Results out this morning..
Net Revenue up 2.7% to $4.5B
NPAT up 4% to $741M
EPS 38.5cps (p/e 14.08 @ $5.42)
Gearing is still pretty high @ 69.5% - will they do a cap raising while the going is good to bring that down?
Dividend still pretty healthy for the year - 27.25c, or approx 5% fully franked.
Apparently slightly below expectations.. Single digit increases not exciting but pretty dependable during a hard year for most co's.
Net Revenue up 2.7% to $4.5B
NPAT up 4% to $741M
EPS 38.5cps (p/e 14.08 @ $5.42)
Gearing is still pretty high @ 69.5% - will they do a cap raising while the going is good to bring that down?
Dividend still pretty healthy for the year - 27.25c, or approx 5% fully franked.
Apparently slightly below expectations.. Single digit increases not exciting but pretty dependable during a hard year for most co's.
Interesting article which ties into nicely with my earlier post...
Michael Feller
Business Spectator
In the wake of Lion Nathan’s agreement to be bought by Kirin and amid Suntory’s discussions to acquire Orangina Schweppes, Japanese brewer Asahi may have little choice other than to bid for Foster’s Group in order to maintain parity with its rivals.
Lion Nathan and Foster’s Group
Shareholders in trans-Tasman beverages group Lion Nathan have voted overwhelmingly in favour of a takeover from Japanese brewing giant Kirin. The $3.4 billion deal will give Kirin control of the 50 per cent of the company it does not already own. Kirin recently bought National Foods and will combine it with Lion to create Lion Nathan National Foods Pty Ltd. Market watchers now wonder if and when Kirin's perennial rival Asahi Breweries will make a bid for Foster's Group, Lion's major rival in Australia and the country's biggest brewer. Asahi used to hold a 19.9 per cent stake in Elders IXL, which later became Foster's, and the companies still have a licensing agreement. Asahi, which also owns Schweppes in Australia, is otherwise speculated to be interested in the European franchise of Schweppes, Orangina Schweppes, which is owned by private equity firms Blackstone Group and Lion Capital. Orangina Schweppes’s owners have otherwise confirmed they are in sales talks with Suntory, yet another Japanese beverages group. Suntory, which also happens to be in slowly-progressing merger discussions with the much larger Kirin, has been buying up small additions to its portfolio of brands, ranging from soft drinks to whisky to beer. Japan’s beverages sector is desperate to find growth outside its, er, saturated market and Australia has been seen as a key target market, being rich and developed, though with a growing population keen to experiment with new flavours and beverages. By contrast, Japan has an enormous array of beverage choices, resulting in high competition and low margins. What this all means is that Foster’s remains a compelling target. Suntory is unlikely to cede Orangina Schweppes to Asahi and Asahi is unlikely to sit and watch its rivals expand in size and strength.
Michael Feller
Business Spectator
In the wake of Lion Nathan’s agreement to be bought by Kirin and amid Suntory’s discussions to acquire Orangina Schweppes, Japanese brewer Asahi may have little choice other than to bid for Foster’s Group in order to maintain parity with its rivals.
Lion Nathan and Foster’s Group
Shareholders in trans-Tasman beverages group Lion Nathan have voted overwhelmingly in favour of a takeover from Japanese brewing giant Kirin. The $3.4 billion deal will give Kirin control of the 50 per cent of the company it does not already own. Kirin recently bought National Foods and will combine it with Lion to create Lion Nathan National Foods Pty Ltd. Market watchers now wonder if and when Kirin's perennial rival Asahi Breweries will make a bid for Foster's Group, Lion's major rival in Australia and the country's biggest brewer. Asahi used to hold a 19.9 per cent stake in Elders IXL, which later became Foster's, and the companies still have a licensing agreement. Asahi, which also owns Schweppes in Australia, is otherwise speculated to be interested in the European franchise of Schweppes, Orangina Schweppes, which is owned by private equity firms Blackstone Group and Lion Capital. Orangina Schweppes’s owners have otherwise confirmed they are in sales talks with Suntory, yet another Japanese beverages group. Suntory, which also happens to be in slowly-progressing merger discussions with the much larger Kirin, has been buying up small additions to its portfolio of brands, ranging from soft drinks to whisky to beer. Japan’s beverages sector is desperate to find growth outside its, er, saturated market and Australia has been seen as a key target market, being rich and developed, though with a growing population keen to experiment with new flavours and beverages. By contrast, Japan has an enormous array of beverage choices, resulting in high competition and low margins. What this all means is that Foster’s remains a compelling target. Suntory is unlikely to cede Orangina Schweppes to Asahi and Asahi is unlikely to sit and watch its rivals expand in size and strength.
