EUROPE: SABMiller Board Recommends New AB InBev Offer

SABMiller has said its board of directors will recommend the higher (and final) offer by Anheuser-Busch InBev to its shareholders. AB InBev’s new offer is worth £79bn, and follows pressure from SABMiller shareholders for better terms due to the drop in the value of the pound sterling.

Jan du Plessis, Chairman of SABMiller noted: “The board’s decision was difficult given changes in circumstances since the board originally recommended £44 per share in cash last November. We believe the final cash consideration of £45 per share to be at the lower end of the range of values considered recommendable. In reaching its decision, SAB’s board considered the best interests of the company as a whole, taking into account all salient facts and circumstances.”

However, the board will also ask the UK court overseeing the deal to split shareholders into two classes, with Altria and Bevco (who hold a 40% stake) to be treated as a separate class.  Such a move would require 75% of both classes to approve the deal for it to go through.

However, the offer continues to face opposition from Aberdeen Asset Management, which has a significant stake, with the fund saying the bid still undervalues SABMiller.  However, Aberdeen welcomed the decision to split the shareholders into different classes.

The shareholder vote is expected to be conducted in October or November, and if approved, the deal is expected to be completed by end-2016.

NAM Implications:
  • This development still means delays…
  • Meaning opportunities for the competition…
  • Need any more encouragement?