Molson Coors Brewing Co. may be close to selling its troubled Brazilian beer business Kaiser for $150 million, according to industry analysts.
“We place a 70 percent chance that an announcement will occur before or during” Molson Coors’ third-quarter conference call in October, UBS analyst Nik Modi wrote in a research note sent to investors Tuesday.
Modi cited an article in Brazilian business magazine Exame and discussions with Molson Coors management. Exame reported that Molson Coors will sell Kaiser to Heineken NV and Femsa, according to Modi’s research note.
Molson Coors spokeswoman Sylvia Morin declined to comment. An unnamed Kaiser spokesman told Just-drinks.com, a beverage trade website, that the company wasn’t aware of any proposed sale.
Molson Coors, which has dual headquarters in Denver and Montreal, bought Kaiser for $765 million in 2002. Molson Coors’ Brazilian business posted an operating loss of $56.2 million during the second quarter.
“Is $150 million the right price? At this stage, the right price for them is anything that they can get for it,” said Carlos Laboy, an analyst with Bear Sterns.
Legg Mason analyst Mark Swartzberg wrote in another research note that $150 million “looks excessive for the right to own a loss-making, share-losing business.”
Modi predicts that an official announcement of a Kaiser sale could boost Molson Coors stock by $2 to $3.
Molson Coors stock closed Thursday at $67.08 per share, up 48 cents.
Molson Coors chief executive Leo Kiely has made Kaiser one of his priorities since Molson merged with Adolph Coors Co. in February, becoming the world’s fifth-largest brewer.
“From a financial standpoint, the cash drain on the Brazilian business is unacceptable and must be addressed quickly,” Kiely said in March.
Heineken, the world’s No. 4 brewer, already holds a 20 percent stake in Kaiser. Femsa, the largest beverage company in Mexico and Latin America, is the maker of Tecate, Dos Equis and Sol beers.
Staff writer Andy Vuong can be reached at 303-820-1209 or avuong@denverpost.com.
