AB InBev has appeared to react angrily to the rejection. A deal would give the maker of Budweiser and Stella Artois important footholds in Africa and Latin America, two big markets where the growth of major beer brands has proved strong.
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AB InBev has until October 14 to make a formal bid, unless SAB agrees to continue talks and applies for an extension.
Altria said Wednesday it supported the current proposal, including the share alternative, and recommended that SABMiller’s management engage “promptly and constructively” in talks.
AB InBev also pointed out that SABMiller’s largest shareholder Altria Group, which owns 27% of the brewer and has three seats on its board, backs the bid that was rejected yesterday. The second is a mixture of cash and unlisted AB InBev paper, which after five years would convert into ordinary listed shares.
One day after the SABMiller chairman Jan du Plessis said that the Belgian-Brazilian brewer was still “very substantially undervaluing” his company with an offer of 42.15 pounds per share, AB InBev had a message for the shareholders. Tobacco firm Altria holds 26.6pc of SAB, while BevCo, the holding company of Colombia’s Santo Domingo family, has a 13.9pc stake.
A blockbuster deal – combining the world’s top two alcoholic drinks companies by sales volumes – would create a global megabrewer worth about 220 billion euros ($250 billion). AB InBev needs SABMiller but has made opportunistic and highly conditional proposals, elements of which have been deliberately created to be unattractive to many of our shareholders.
Notwithstanding our good faith efforts, the Board of SABMiller has refused to meaningfully engage with us.
Shares in SABMiller now trade at £36.30 and were at half that level at the beginning of the decade, so if previous performance is any guide to future performance – which it isn’t – the answer to Brito’s rhetorical question is: not long.
In his USA conference call, Mr Brito appealed to SABMiller’s minority shareholders to voice their view to the board, which could be interpreted as a “hostile lite” approach (despite ABInBev having stressed its desire to gain the recommendation from the SABMiller board).
SABMiller makes Miller Lite, while AB InBev owns Bud Light beer.
Corrections & Amplifications: The proposal values SABMiller at up to £ 68.24 billion (about $104 billion). If it does manage to buy its rival it looks like it’ll have to be a forced marriage, after it accused SABMiller of lacking “credibility” for rejecting a third takeover offer.
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SABMiller – the British maker of Foster’s, Grolsch and Pilsner Urquell – rejected on Wednesday an improved $103-billion takeover from Anheuser-Busch InBev, arguing the third attempt was too low.
