Under this offer shareholders would get 2.37 pounds a share in cash plus 0.48 special unlisted AB InBev shares which are convertible into ordinary AB InBev stock after a five-year lock-up period. Two earlier offers, made privately and valued at 40 pounds and 38 pounds, respectively, had already been rejected by the board, the company said.
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It said the cash part of the new offer values SABMiller around 44% more than the closing price of its stock on September 14.
Altria Group holds a Zacks Rank #2 (Buy).
The deal’s structure has been a key point in negotiations. Altria has expressed support for the offer, but Brito said AB InBev now does not have the support of Bevco.
“AB InBev is disappointed that the board of SABMiller has rejected both of these prior approaches without any meaningful engagement”, said the brewer in a statement. AB InBev gained 1.8 percent to 99.86 euros.
“The cash consideration under the transaction would be financed through a combination of AB InBev’s internal financial resources and new third party debt”, according to a statement by AB InBev.
“AB InBev believes that the revised cash proposal of GBP42.15 per share is at a level that the board of SABMiller should recommend”.
Rank equally with A-B InBev ordinary shares with regards to dividends and voting rights.
Brito said he was committed to a friendly deal, but did not rule out going hostile. Despite the increases, the SABMiller board voted unanimously to reject the offer out of hand. Representatives of AB InBev didn’t respond to requests for further comment.
The report was published early, at a time when Anheuser-Busch InBev revealed in mid-September that it had been in contact with SABMiller, although a formal offer has yet to be made for a merger between the 2 industry world leaders.
USA company AB InBev is the world’s largest beer maker, responsible for brands like Budweiser, Corona, and Stella Artois, while SABMiller is the second-largest brewer in the world and makes beers like Fosters and Grolsch.
Any deal between the two worldwide brewing giants would mean a broader geographical reach into fast-growing emerging markets: AB InBev has a strong presence in Latin America, while SABMiller sells across Africa. The latest cash offer was $64.57 per share for the UK-based company; up from an initial $58.21 per share offer, while was later raised to $61.27 per share.
A-B InBev listed details of the proposal on a website, www.globalbrewer.com. Sales rose by just 0.5% in the United States a year ago when measured by volume, according to the Brewers Association. To show its commitment to the continent, the company plans a secondary listing in Johannesburg and a local board.
If accepted, the blockbuster deal would create a drinks giant worth more than £180billion and be the biggest-ever takeover of a British company.
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SABMiller, on the other hand, seems unimpressed with the third offer, saying in a statement that AB InBev “is very substantially undervaluing SABMiller”.
