SAB/Foster’s merger uses scheme, equity swaps

Author: | Published: 21 Sep 2011

SABMiller’s A$9.9 billion ($10.2 billion) recommended cash offer for Australian liquor company Foster’s Group is structured through a scheme of arrangement and utilises cash-settled equity swaps, it has been announced.

The scheme, announced on Wednesday, contains a recommended cash offer of A$5.10 per Foster’s share. Foster’s will pay shareholders a return of capital of A$0.30 per share as part of a capital management initiative, which is subject to approval by the Australian Tax Office and is a condition precedent.

The acquisition is financed by internal resources and committed financing, while the cash cost was reduced by A$69 million by entering into a number of cash-settled equity swap contracts. These swaps, which have exposure equivalent to 78 million shares, represent 4% of issued...