Bernstein
SAB/ABI first take...SAB Miller makes a statement ABI intend to make a bid, no terms mentioned and no firm bid but ABI have 28 days to make a bid or withdraw for 6 months. Trevor not surprised at interest but if a deal gets done at ~£40 then it costs 7 years to hit Cost of Capital unless ABI can get huge synergies ~ 7% sales. The mix of cash and shares clearly an issue here and maybe ABI have decided this is the last big beer deal out there and bends their normal parameters. SAB would probably have to make two disposals, Miller Coors (probably to Molson) and Snow in China (probably to CRE). Will be back with more when we have it. One surprise is why ABI has gone up so much...JPM
ABI/SAB: After all the press spec, statement from SAB this morning confirming that ABI intends to make an offer for the co. No details have been disclosed and no formal offer has yet been made. For a first glance scenario analysis, using our note from Feb where we assumed a 30% premium to SAB's closing price of 13th Feb i.e. £44.95, we would expect that at i. 100% debt financed this would be 20% uncreative to ABI (taking N/D EBITDA up to 5x - a level that ABI would be able to handle) & ii. 50% debt financed it would be 5% accretive to ABI: