SABMiller has asked employees to pause the process of integrating its operations with those of Anheuser-Busch InBev (AB InBev) as the brewer’s board weighs its sweetened takeover offer, according to two sources familiar with the matter.
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SABMiller said that it would “continue to consult with shareholders” and would review the revised offer.
The beer behemoth based in Belgium raised its offer of cash to £45 or $59.10 per share from its previous offer of £44 to appease numerous shareholders of SABMiller based in London, who have been watching the value of the offer drop with sterling.
SAB’s top two shareholders, USA tobacco firm Altria and the Santo Domingo brewing company, will get cash and shares worth £51.31 per share under the new terms, a tax-bill cutting ploy created to win their support for the deal.
But SABMiller shareholder Aberdeen Asset Management immediately poured cold water on the improved offer, calling it “unacceptable” and maintaining that it undervalues the company while continuing to favour SABMiller’s two major investors.
During Tuesday trading, SABMiller shares decreased 0.3% to £44.26 in London after an earlier modest up.
The pound has collapsed in value versus the dollar since the June 23 vote, falling over 10% to 1.31 USA dollars.
SABMiller’s board is still reviewing AB InBev’s improved offer and has not chose to walk away from the deal, different people familiar with the matter said.
What looked like a done deal just weeks ago has morphed into a battle pitting the world’s biggest brewer against SAB investors who oppose terms they say withered since the United Kingdom voted last month to leave the European Union.
Belgian-based AB InBev boosted its cash offer to £ 45 ($59.12) a share from £ 44 a share to appease SABMiller shareholders, who had watched the value of the offer fall along with sterling.
That alternative that contains shares has soared in its value because shares of AB InBev are in euros.
SAB has engaged an extra advisor, Centerview, to provide additional financial advice. The sum represents a £1 per share increase from its initial £71bn offer made in November 2015, taking the takeover offer up to £79bn.
If the SAB board accepts, they risk alienating institutional investors such as Aberdeen Asset Management ahead of possible shareholder votes to approve or reject the deal.
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Activist investors saw the currency fluctuations as an opportunity, speculating that AB InBev may be forced to revise its offer in order to placate SABMiller shareholders. Though chairman of both the companies met last week, but they didn’t discuss the terms of the deal.
