Foster's Demerger Immanent: Analyst

By Ian Neubauer

A strategic review of Foster’s Group wine business is likely to result in a demerger of partial sale of its wine assets, according to a leading analyst.

“We believe a demerger or partial sale of FGL’s wine business is a likely outcome from its wine review. Such a process would bring into focus sum-of-the-parts valuations,” said analyst Goldman Sachs JBWere (GSJBW) in a document sourced by TheShout.

A spokesperson for Foster’s said the group would not discuss any potential outcomes while its strategic review is underway.

"As we've said since launching the review, all options to improve our wine business are being considered. It's premature to draw any conclusions while the review is underway," the spokesperson said.

Foster’s embarked on a strategic review of its troubled wine business on June 10 that coincided with a revised fiscal 2008 earning and the shock resignation of former CEO, Trevor O’Hoy.

Fosters shares were trading at $5.31 at 11:00am today (August 21).

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