SABMiller investor calls for AB InBev to raise offer
The fourth-largest shareholder in SABMiller is pushing for Anheuser-Busch InBev to improve its £65bn offer, less than 72 hours ahead of a bid deadline imposed by UK regulators.
A senior official at South Africa’s state-owned Public Investment Corporation, which manages more than $130bn in pension funds and is the country’s most powerful investor, said that key among its concerns was clarification of a proposed listing of a combined brewer on the Johannesburg Stock Exchange.
The comments from PIC highlight a split among investors just days before the 5pm expiry on Wednesday by which, under Takeover Panel rules, AB InBev must make a formal offer or walk away for six months.
Carlos Brito, AB InBev chief executive, has not ruled out making a hostile bid, but said last week that he hoped SABMiller’s board would back an offer.
With the exception of US tobacco maker Altria, which is SABMiller’s biggest shareholder, the board last week rejected AB InBev’s cash offer of £42.15 per share in cash and a partial share alternative as “very substantially undervaluing” the brewer.
Altria has said it is willing to accept an offer of £42.15, or higher, and has called on SABMiller chairman, Jan du Plessis, to negotiate with AB InBev. But Colombia’s Santo Domingo brewing dynasty, which holds 14 per cent of the company and has two board seats, voted to reject the offer.
The two largest shareholders control 41 per cent of the brewer.
Alejandro Santo Domingo, scion of the Colombian brewing dynasty, and one of the two members of the family investment vehicle, BevCo, on the SABMiller board has emerged as the kingmaker in what would be the biggest takeover of a London-listed company.
Without BevCo’s support, AB InBev cannot finance its offer, which is dependent on the two largest shareholders opting for the partial share offer, though it is theoretically open to all shareholders.
PIC, which holds about 3 per cent in SABMiller, said it also wanted a share transaction rather than a cash deal. The PIC official said he was concerned that AB InBev was “looking to satisfy the two major (SAB) shareholders first”.
Mr Brito has repeatedly said the partial share offer was designed “for and with” the major shareholders.
The PIC official said: “It’s very important for them to come back with a better offer that takes care of all shareholders’ concerns. Most importantly, if there’s a listing it must be immediate, it must be through a swap of shares. There’s no way we are going to accept cash because we don’t know what to do with that cash in the current market.”
He added that the PIC would be guided by SAB’s board.
A listing on the JSE for any new entity is seen as a critical condition for SABMiller’s South African investors, which collectively hold 10 per cent in the brewer. The country’s pension funds are required to invest 75 per cent of the funds in domestic assets.
AB InBev has said any new entity would have a secondary listing on the JSE, but South African shareholders say it is unclear if it would be deemed a domestic stock.
Cape Town-based Investec Asset Management, which holds about 0.2 per cent in SAB, has also written to the brewer’s board outlining its issues around a proposed deal.
“We want SAB’s board to engage with InBev . . . we are supportive of the SAB board rejecting the £42.15 offer by InBev,” Rob Forsyth, a portfolio manager at Investec said.
“We think as shareholders of both companies, there can be a higher price that satisfies both sets of shareholders and is fair and we would like the board to work towards that.”