AB InBev’s approach, made public on Wednesday after two weeks of closed-door discussions, raised the stakes in the back-and- forth battle over combining the world’s two largest beermakers. The latest offer is 44 percent higher than SABMiller’s mid-September closing price on the day before speculation emerged about a deal. That corresponds to the amount held by Altria and the Santo Domingo family.
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The deal’s structure has been a key point in negotiations. “Importantly, the partial share alternative enables appropriate financing to be achieved and supports the cash offer at a higher price than A-B InBev would otherwise be able to offer”.
He said the rival beer giant “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”.
SABMiller said in a statement that in an October 5 meeting with AB InBev, the predator firm tabled a second bid of £40 a share and indicated it would raise its offer to £42, subject to a recommendation by the board and other conditions.
Under this offer shareholders would get 2.37 pounds a share plus 0.48 special unlisted AB InBev shares which are convertible into ordinary stock after a five-year lock-up period.
But SAB Miller said its board, excluding the directors nominated by its biggest shareholder Altria (MO.N), has unanimously rejected the proposal.
SABMiller rejected Anheuser-Busch InBev’s £65.2-billion takeover proposal as too low, putting it in conflict with its biggest shareholder, which urged the brewer to support the overture.
AB InBev has swallowed Seattle’s Elysian Brewing, Oregon’s 10 Barrel Brewing and Chicago-based Goose Island in the a year ago or two. “That was just testing grounds”. SAB shares dropped on Tuesday amid rumors that management was planning to fight any takeover offer.
SABMiller didn’t immediately respond to requests for comment. Given the size of the financing and SABMiller’s United Kingdom listing, AB InBev will need to outline details to show certainty of funds when it makes a formal offer, several bankers said.
SABMiller Plc, the brewer that’s in takeover talks with Anheuser-Busch InBev NV, said beer volume returned to growth in the second quarter, helped by Africa and Latin America.
AB InBev has already grown into the world’s biggest brewer through a string of deals to give it ownership of a wide range of global brands, including Budweiser, Corona, Stella Artois, Beck’s, Leffe and Hoegaarden.
If the two companies were to merge it would create a £180 billion company that would produce one out of every three beers drunk globally and would generate revenue of £42 billion.
Irrespective of whether the deal goes through ore not, traders seem to see value in it. They have lapped up SABMiller shares on the LSE, where they are now up solidly.
‘AB InBev is very substantially undervaluing SABMiller’.
“SABMiller is the crown jewel of the global brewing industry”, du Plessis said.
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“In the US and China, in particular, the company would seek to resolve any regulatory or contractual considerations promptly and proactively”, it said.
