EUROPE: AB InBev Raises SABMiller Bid

Anheuser-Busch InBev has raised its bid for SABMiller, putting forward what it termed a “final” offer. The move comes after pressure from existing SABMiller shareholders for a revised and improved offer.

AB InBev is now offering £45 a share in cash, or a mostly stock option worth £51.14. This values SABMiller at £79bn, and represent a £1-a-share increase on the cash offer and a 88p-a-share increase on the stock alternative.

The move follows demands from hedge funds that AB InBev revise the offer given the drop in the value of the pound sterling over the past month. The funds have also claimed that the stock alternative will benefit Altria and BevCo – who own an estimated 40% stake n SABMiller – more than they will benefit others.  The stock option offers shares in AB InBev that will not trade publicly for five years.

SABMiller confirmed that its Chairman (Jan du Plessis) spoke to AB InBev Chairman Olivier Goudet to discuss the “recent exchange rate volatility and market movements” following the Brexit vote.  However, it stressed that there was “no discussion or agreement about the terms” of a revised offer. SABMiller said it will consult with shareholders and its board will review the new offer in due course.

NAM Implications:
  • Currency moves mean that the potential synergies/cost savings need to be re-factored, or the bid-price is raised…
  • Hopefully this latest offer will suffice…
  • Meanwhile, all NAMs affected need to conduct what-ifs on either outcome…
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