I thought this was worth a new thread of its own. No doubt there will be more news by the time everyone is up....
n4sir wrote:Ps. Saw this on the "other" forum, and it was mentioned in tonight's news too.
Hi,
Just a new article hitting the world of finance today.
MELBOURNE (Dow Jones)--Foster's Group Ltd. (FGL.AU) said Thursday it has acquired an 18.8% stake in rival premium winemaker Southcorp Ltd. (SRP.AU) and is currently in discussions which may lead to a major corporate announcement.
Foster's said it bought the stake at A$4.17 a share compared with Wednesday's closing price of A$4.25.
davidw
I wonder if a certain Director and Shareholder is getting a little nervous?
Certainly is huge news, if a "major corporate announcement" does occure (ie full takeover) then there is even further consolidation amongst the big wine companies.
Still, most incredible is just thirteen days into 2005 and the first of TORB's four predictions for the year has already come true. Per his "2004 - The Wine Year in Review" we can now all assume:
- Grange prices will fall by 50%. (Suggest Fosters do this straight away to generate extra cash flow, regain customer satisfaction etc. ) - Portugese cork industry will solve cork taint and oxidisation . (Maybe they'll embrace screw caps ! More likely Procork/Diam etc.) and
- Woolworths and Coles will sell all their bottle shops to independent operators .
sell any fosters shares now is my recommendation, the southcorp corporate memory will drag any share price down. Look at the long term performance of any company that has relied on penfolds to generate a profit, its not good. They have delivered growth but not profits, which is what the market wants.
My tip is that the oatleys have made an agreement to buy the rosemount brand bag with maybe the denman assets and the SA winery. Look otut for some other brand sales/closures in the near future
Certainly is huge news, if a "major corporate announcement" does occure (ie full takeover) then there is even further consolidation amongst the big wine companies.
Still, most incredible is just thirteen days into 2005 and the first of TORB's four predictions for the year has already come true. Per his "2004 - The Wine Year in Review" we can now all assume: - Grange prices will fall by 50%. (Suggest Fosters do this straight away to generate extra cash flow, regain customer satisfaction etc. ) - Portugese cork industry will solve cork taint and oxidisation . (Maybe they'll embrace screw caps ! More likely Procork/Diam etc.) and - Woolworths and Coles will sell all their bottle shops to independent operators .
Well done Ric!
Cheers all
Andy
I'm not surprised that's the case, as the thought did initially cross my mind. It's been rumoured for a while that Fosters have been very interested in Southcorp with the major sticking points being the share price and the Oatleys. Buying their share neatly sidesteps the issue by getting them off the scene and not starting a frenzied buying spree to protect their interest. I guess now's as good a time as it gets, with a strong $A to ward off overseas buyers and the cost cutting effects to come into full swing in the future to (hopefully) generate higher profits and share price.
I'd be surprised if they cut the price of Grange though - with the limited production in the next couple of years and high overseas demand they're virtually guaranteed full sales, even if it does cheese the local buyers off.
My tip is that the oatleys have made an agreement to buy the rosemount brand bag with maybe the denman assets and the SA winery. Look otut for some other brand sales/closures in the near future
I hope they get a decent amount of cash from the Oatleys if this is the case. While the Rosemount operations have been written down in value they have managed to plough a lot of money into their Hunter operations and acquired the Seaview/Edwards & Chaffey winery for themselves. Sure they've lost out on the drop of their shares in Southcorp from the original takeover, but then so has every other Southcorp shareholder.
I wonder it we will see 'buy a bottle of grange and get a free slab of crown lager'?
I know southcorp has been put through the ringer by many but in dealing with both companies, southcorp is a breeze to deal with in comparison to Beringer. I would hate to think of what Beringer/Fosters will do with brands like Seppelt.
Why do I say this? Well Fosters is a global drinks company. The focus is on volume and profit. Southcorp has heaps of brands that probably do not fit into any of these categories.
If a brand or product doesn't meet a set of volume criteria it gets the chop. Beringer recently deleted some of their popular sherries because it was more profitable for them to delete them and concentrate on more profit driven products. Whilst is good for the analysts, what happens when they look at products like Seppelt Rare Muscat? Two things: 1. They either jack the price up or delete it.
Let's hope as 'wine lovers' that Fosters does not get control of Southcorp.
just my 3 cents worth,
anthony
Good wine ruins the purse; bad wine ruins the stomach
Spanish saying
I wonder it we will see 'buy a bottle of grange and get a free slab of crown lager'?
I know southcorp has been put through the ringer by many but in dealing with both companies, southcorp is a breeze to deal with in comparison to Beringer. I would hate to think of what Beringer/Fosters will do with brands like Seppelt.
Why do I say this? Well Fosters is a global drinks company. The focus is on volume and profit. Southcorp has heaps of brands that probably do not fit into any of these categories.
If a brand or product doesn't meet a set of volume criteria it gets the chop. Beringer recently deleted some of their popular sherries because it was more profitable for them to delete them and concentrate on more profit driven products. Whilst is good for the analysts, what happens when they look at products like Seppelt Rare Muscat? Two things: 1. They either jack the price up or delete it.
Let's hope as 'wine lovers' that Fosters does not get control of Southcorp.
just my 3 cents worth,
anthony
Good wine ruins the purse; bad wine ruins the stomach
Spanish saying
)
. (Maybe they'll embrace screw caps 
! More likely Procork/Diam etc.) and
.
