Foster's
said Tuesday
that its board had accepted the resignation of CEO Trevor O'Hoy and
that it would conduct a strategic review of the global wine business.
Credit
Suisse's Gandler values the wine operations at A$3.8 billion ($3.55
billion). The company would be selling "at the bottom of the consumer
and wine cycles," he wrote. Plus, the Australian field operations are
suffering from what Gandler termed "change fatigue." A shift in
corporate ownership could shake up distribution relations and other
operations that are now stabilizing after an unsteady period.
The
wine business in the Asia-Pacific region is worth under A$2 billion, by
the analyst's estimate. U.S. and European wine businesses are valued at A$1.6
billion and A$372 million, respectively. Both sums translate to 9 times
Ebitda.
If U.S.-based Beringer Blass
became separately listed, it could attract the interest of
Constellation Brands Inc. Beringer Blass owns 10,000 acres of vineyards
in Napa, Sonoma and other parts of California that alone could be worth
A$1.5 billion. Fairport, N.Y.-based Constellation is the world's
largest winemaker, and has been an aggressive acquirer. -
Chris Nolter
As Australian beverage company Foster's Group Ltd. considers strategic
alternatives for its wine business, Credit Suisse Group analyst Larry Gandler
suggests in a Thursday note that a spinoff would be more
productive than a sale. 
