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Modelo Board Said to Have Discussed Foster’s Bid Without Putting to Vote

Grupo Modelo SAB de CV (GMODELOC) discussed with its board of directors a proposal to make a joint bid with Molson Coors Brewing Co. (TAP) for Foster’s Group Ltd. (FGL), though didn’t put the plan up for a vote at a meeting this week, said a person with knowledge of the matter.

Mexico City-based Modelo, the maker of Corona beer, may still be considering an offer for Foster’s, said the person, who declined to be identified because the matter is private. Modelo would need to win support from Anheuser-Busch InBev AB, which has 9 seats on Modelo’s 19-person board and holds a 50 percent non-controlling stake in the Mexican brewer.

Modelo has been talking with Molson about a joint offer for Foster’s, people familiar with the matter said earlier this month. The board met on June 13. A spokeswoman for Modelo declined to comment. The Wall Street Journal earlier reported on the board meeting.

Foster’s distributes Modelo’s Corona brand in Australia. The Australian brewer last month spun off its Treasury Wine Estates Ltd. division, the world’s second-largest winemaker, to concentrate on beer.

Foster’s, with a market value of about A$9 billion ($9.6 billion), has gained 4.5 percent since Treasury started trading on May 10 compared with a 3.9 percent tumble for the benchmark S&P/ASX 200 index in the same period. The stock fell 0.9 percent to A$4.61 as of 12:52 p.m. in Sydney trading.

AB InBev gained the Modelo stake with the $52 billion purchase of Anheuser-Busch in 2008. Carlos Fernandez, chairman and chief executive of Modelo, sued to block the sale of the Modelo shares to AB InBev and lost in a ruling last year.

Fernandez has rejected selling control of Modelo to AB InBev and has said he’d be interested in buying back the stake. At the end of March, Modelo had 27 billion pesos ($2.29 billion) of cash and short-term investments and no debt.

Modelo rose 1.1 percent to 71.03 pesos in Mexico City trading at 4:10 p.m. New York time. The shares have declined 7.1 percent this year.

16 Jun. 2011

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