Foster's wine bidders face twin headaches

on 12/10/10 at 8:07 am

Industry

Private equity firms running the ruler over Australian brewer Foster’s wine business could baulk as the Aussie dollar’s surge to 28-year highs has raised the unit’s price tag by 20 per cent since a sale was first proposed.

Private equity managers say banks may also be less willing to lend for a cyclical asset dependent on fickle consumers, compared with the defensive credentials of hospitals operator Healthscope – sold in July for $2 billion in Australia’s largest private equity buyout since the boom.

The Aussie’s rally above 99 US cents last week made Foster’s $US3 billion wine business about 9 per cent more expensive than when the firm was first approached with an offer from US buyout firm Cerberus last month.

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