August 1, 2016
MAKOR - SABMILLER / AB INBEV - Our thoughts following the SAB board recommendation of the cash consideration
We note the statement from the SABMiller board that they are unanimously recommending the cash consideration and that SAB shareholders vote in favour of the UK Scheme at the UK Scheme Court Meeting and in favour of the SABMiller Resolutions at the SABMiller General Meeting.
As per the Co-operation Agreement (dated 11 November 2015), the voting requirements are as follows, but we note, that the SAB board have also today announced their intention to propose to the UK Court that Altria and Bevco be treated as a separate class of shareholders and allow other SABMiller shareholders to vote on the revised £45 offer separately:
(i) UK Scheme Court Meeting – 75% of SAB shares present and voting either in person or by proxy provided that there is a quorum of at least 50% of outstanding SAB shares attending and voting at the meeting.
(ii) SABMiller General Meeting – 75% of SAB shares present and voting (the SABMiller General Meeting will be held immediately after the UK Scheme Court Meeting.
It remains undecided if the UK court will determine that the vote should be split into two classes, and, if a decision is made to split the vote, whether the voting threshold will then be 75% of disinterested shareholders (provided that a majority of disinterested SAB shareholders - excluding Altria and Bevco - are present and voting at the meeting).
We spoke to the Takeover Panel who said that the decision to split the vote is a decision for the Court. He believes that the shareholder voting requirement is likely to be the same for both classes of shares, if a decision is made by the Court to split the vote (i.e. 75% of SAB shares present and voting either in person or by proxy provided that there is a quorum of at least 50% of outstanding SAB shares attending and voting at the meeting).
Now that the SAB board recommendation has been obtained, our source close to ABI confirmed that ABI expect the integration planning to recommence as soon as this weekend. We remind investors that ABI are highly committed to the transaction and are said to be providing “incentives” to their employees to complete the transasction in an October/November timeframe.
We currently expect the Belgian Offer Document to be published shortly now that all the pre-conditions have been satisfied and for the UK Scheme Document to be published shortly after a decision is made by the UK High Court. We understand that the Court only meets on Mondays and that submissions have to be made by the previous Wednesday in order to get on the agenda for the following Monday. Thus, at the very earliest, SAB have until Wednesday, 3 August to lodge their request with the UK court in order to get on the Court agenda for Monday, 8 August.
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