Foster’s says “no” to AUD 2.5 billion offer for its wine unit

Foster’s, the largest alcoholic beverage maker in Australia, said in May that it planned to list its beer and wine operations separately so that they could each develop their own corporate strategies.

Foster’s has put in about AUD 6.4 billion into its wine business in recent years, which it will probably never get back.

However, the bid severely undervalued Foster’s wine operations. Analysts expect the wine unit to fetch between AUD 3 million and AUD 4 million.

But that’s private equity for you. They like to buy low and sell high.

Still, the expression of interest in the wine assets from private equity will be good news to any company which has an interest in Foster’s beer assets.