The newest bid includes a slightly improved alternative offer for shareholders that would prefer a mix of cash and stock.
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Aberdeen Asset Management, with a 1.17 per cent SABMiller stake according to Thomson Reuters data, said the revised offer was still unacceptable, although analysts suggested the deal was now likely to go through.
Another firm, US hedge fund Elliott Management had written to the SABMiller board to express concern last week, the Financial Times reported.
The transaction values SABMiller’s entire “issued and to be issued” share capital at around pound sterling79 billion ($103 billion), ABInbev said.
A recommendation by SABMiller’s board could come within days, the reports said.
Numerous activist investors in SABMiller, including Elliott Management, had raised concerns about the deal following a 12% drop in the pound versus the dollar since the United Kingdom voted in June to leave the European Union.
AB InBev’s decision to revise its offer follows complaints from investors on the original terms of the agreement. That offer, valued at about 39 pounds a share when the acquisition was announced previous year, had surged to more than 50 pounds late on Monday. However, the company failed to address the fact that this alternative is valued at substantially more than its cash offer. AB InBev could only change it by dropping the offer and waiting six months to make another.
AB InBev also tweaked the terms of a share-and-cash structure targeted at SABMiller’s two biggest shareholders, increasing the cash element to 4.66 pounds from 3.78 pounds in November.
This acquisition is important for AB InBev’s development.
As of 25 July’s close, the partial share alternative was worth £51.14 a share but that did not account for the lockup period of five years or “any discount for the unlisted nature of the restricted shares”.
London-based SABMiller started to work with AB InBev in the spring to integrate finance, technology, procurement and certain supply-chain functions, the Journal reports.
Aberdeen Asset Management said the revised offer undervalued the company and continued to favor SABMiller’s two major shareholders, Altria and Bevco. First is that SABMiller investors who are based in the US and hold almost 20% of the brewer’s floating shares, will get less of a payoff than they predicted in terms of dollar if the pound remains at its recent low against the US Dollar when the deal completes.
The SABMiller board confirmed that it had engaged private investment firm Centerview Partners last week to provide additional financial advice alongside that of its existing financial advisers.
Budweiser-owner AB InBev has responded to investor concerns and upped its mega-merger bid for rival SABMiller to an effective £79bn. The same 44 pounds will now only get you about $57.52. That means AB InBev doesn’t benefit from the weakness of the British Pound, making the latest offer more expensive. “It’s a negotiation at the end of the day”.
SABMiller said its board will study the new offer and comment thereafter.
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