AB InBev expected to submit improved bid of 4300p to 4400p per share for SABMIller this week
Anheuser-Busch InBev is likely to submit an improved bid of 4300p to 4400p per share for the FTSE-100 brewing company SABMiller this week, The Sunday Times reported. The newspaper cited sources close to AB InBev who added that the Belgian brewing group will submit the revised offer ahead of the deadline of Wednesday, 14 October set by the Takeover Panel.
SABMiller’s board last week rejected a 4215p per share offer from AB InBev, which valued SABMiller at around GBP 65bn (EUR 87.68bn).
It is thought that AB InBev is prepared to improve its offer to nearer to GBP 70bn, but the Belgian brewing company is ready to withdraw should SABMiller refuse to offer some concessions, according to the report.
AB InBev's current offer of 4215p per share is thought to be pounds, rather than pennies, away from a value that SABMiller would consider, the item said.
SABMiller chairman Jan du Plessis has indicated that he will allow an extension to Wednesday's bid deadline and enter talks only if AB InBev makes a substantial improvement to its offer, the item continued. As the bid target, SABMiller has the right to refuse an extension to the deadline, the newspaper's Agenda column noted.
Although some SABMiller shareholders such as Aberdeen Asset Management and Public Investment Corp have indicated that they support the board's rejection of AB InBev's 4215p per share bid, other shareholders have urged the board to enter talks, the article said. The report quoted Ian Liddle, the chairman of SABMiller shareholder Allan Gray, who said 4215p is sufficient to extend the deadline for the offer and keep options open for SABMiller shareholders.
A longer analytical report in The Sunday Times said SABMiller’s largest shareholder, the Virginia-based tobacco company Altria, had been discussing with AB InBev ways to structure a takeover of SABMiller for six months. Altria last week said it supported the 4215p offer from AB InBev.
The Belgian brewing group has also held talks with SABMiller’s second-largest shareholder, the Santo Domingo family, the item continued. Although those talks were less conclusive than AB InBev’s discussions with Altria, they left the Belgian group with the impression that progress could be made, according to the report.
The Santo Domingo family’s two board nominees at SABMiller voted to reject AB InBev’s 4215p per share offer last week, the item continued. The report cited senior sources familiar with the board’s decision who speculated that the Santo Domingos are not keen on AB InBev’s strategy of cust-cutting. However, others said the family is merely awaiting an improved offer, the article added.
AB InBev says the partial share alternative it had proposed was drawn up “with and for” the Santo Domingo family’s BevCo investment vehicle prior to any bid approach.
It is known that AB InBev is in touch with BevCo via the private equity group 3G Capital, the item continued. BevCo is an investor in 3G, which holds a 21% stake in AB InBev, the article noted.
SABMiller’s share price closed 27.5p up at 3668.5p in London on Friday, 9 October, giving the company a market capitalisation of GBP 59.39bn.