SYDNEY (Reuters) - Beverage giants SABMiller SAB.LSABJ.J and Japan’s Asahi Breweries 2502.t are eyeing Foster’s Group’s FGL.AX beer operations but have not decided whether to make formal offers, sources familiar with the situation said Monday.
Long-running interest in the Australian brewer’s beer operations, which analysts say could be worth more than $10 billion, resurfaced Monday after Britain’s Sunday Times said SABMiller was considering buying the business.
Foster’s shares surged more than 6 percent in early trade and were up 5.3 percent at A$6.13 at 10:23 p.m. EDT.
Responding to media reports, Foster said it was not aware of any unannounced information driving the stock.
A number of potential suitors including SABMiller and Asahi have been looking at the business since Foster’s announced formal plans to split its beer and wine operations earlier this year, two sources said, adding neither had formally decided whether to make an offer.
“SAB and Asahi are the two names that keep popping up and given the demerger process in train you would expect people who ever thought they might look at Foster’s to get teams together to do so,” one source, who declined to be named because he was not authorized to speak to the media on the matter, said.
Another source said Asahi remained interested.
The Australian newspaper reported on Monday that SABMiller had hired JPMorgan and Royal Bank of Scotland as advisers for a potential bid but no decision had been made.
Analysts and fund managers say Foster’s could attract bids of around $10 billion as its operates one of the highest-margin brewing operations in the world. Its brands include Foster’s Lager, Victoria Bitter and Pure Blonde.
SABMiller owns the brewing rights to Foster’s in the United States.
SABMiller, the maker of Peroni and Miller Lite, generates about 85 percent of its profits from the emerging markets of Latin America, Africa and Asia.
Asahi declined to comment on Foster‘s.
Reporting by Michael Smith; editing by Balazs Koranyi