Analysts pour cold water on SABMiller Foster’s bid talk

SABMiller is unlikely to fork out £7 billion for Australian brewer Foster's any time this year, industry watchers said today after reports that a bid could be imminent.

Shares in SABMiller dropped almost 2% at start of trading today before recovering to be 13p lower at 1838p. Foster's shares rose almost 8%.

Talk of a SABMiller bid for Foster's has been around for two years but analysts today said that any move is unlikely until details of how Foster's plans to demerge its ailing wine division are made public.

Ian Shackleton at Nomura said: "We remain sceptical that a bid will come before the planned demerger in early 2011."

Others said Foster's shares have already risen sharply on demerger plans making an opportunistic bid for the whole business before it splits much less likely.

SABMiller could face competition if it bids for Foster's. Japanese brewer Asahi has already made its interest known and Chinese groups Tsingtao and Bright Food could bid.