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AB InBev raises takeover offer for SABMiller to $104bn SABMiller dismissive of $104bn takeover offer from AB InBev
(35 minutes later)
Anheuser-Busch InBev has gone public with an increased takeover proposal to buy SABMiller for $104bn (£68bn) in an attempt to put pressure on the UK brewer’s board to form a brewing giant producing a third of the world’s beer. SABMiller has indicated it will reject a $104bn (£68bn) takeover proposal from Anheuser-Busch InBev after the world’s biggest brewer went public with an increased approach for the UK company.
SABMiller’s biggest shareholder, Altria, which owns 27%, said it supported the proposed increase and told its board to get on with talks to finalise a recommended offer. AB InBev said it also expected SABMiller’s second largest shareholder, BevCo, which owns 14%, to support the proposal. With a week to go until a deadline for a firm offer, the Belgian maker of Stella Artois and Budweiser sought to apply pressure to SABMiller by announcing it was willing to pay £42.15 a share in cash for the British brewer, which owns Grolsch, Peroni and Coors.
If the deal goes ahead, it would be the biggest ever takeover of a UK company. It said it had the support of SABMiller’s two biggest shareholders for the proposed offer. If the deal goes ahead, it would be the biggest ever takeover of a UK company and would create a brewing giant producing a third of the world’s beer.
SABMiller said that on 5 October, AB InBev’s chief executive, Carlos Brito, put forward a proposed offer at £40 and suggested AB InBev might increase its proposed offer to £42. SABMiller’s board decided that offer would undervalue the company.
The UK company said its board would meet to consider the £42.15 proposal but noted that it was barely higher than the earlier approach that it had rejected.
SABMiller said: “It should be noted that the all-cash offer within the new proposal announced today is only £0.15 higher than the £42 proposal considered and rejected on 5 October 2015. The board will, of course, meet formally to consider the £42.15 proposal as soon as practicable and a further announcement will be made thereafter.”
SABMiller gave the latest proposal a cool reception despite its biggest shareholder, Altria, which owns 27%, saying it supported the proposed increase. Altria told SABMiller’s board to get on with talks to finalise a recommended offer. AB InBev said it also expected SABMiller’s second largest shareholder, BevCo, which owns 14%, to support the proposal.
Related: SABMiller 'set to reject' AB InBev offerRelated: SABMiller 'set to reject' AB InBev offer
With a week to go until a deadline for a firm offer, the Belgian maker of Stella Artois and Budweiser said it was willing to pay £42.15 a share in cash for the British brewer, which owns Grolsch, Peroni and Coors.
It is the the third approach AB Inbev, the world’s biggest brewer, has made to buy SABMiller, having privately proposed bids of £38 a share and £40 a share in cash. The latest approach is 44% more than SABMiller’s closing share price on 14 September, the day before rumours of an impending approach reached the market.It is the the third approach AB Inbev, the world’s biggest brewer, has made to buy SABMiller, having privately proposed bids of £38 a share and £40 a share in cash. The latest approach is 44% more than SABMiller’s closing share price on 14 September, the day before rumours of an impending approach reached the market.
SABMiller shares rose 3% to £37.28 in early trading on Wednesday. SABMiller shares were up 1% to £36.60, well below the proposed offer price, after the company issued its response to AB InBev’s announcement.
AB InBev said it was disappointed that SABMiller’s board rejected its previous offers without meaningful discussion and that it had made its latest approach public to give shareholders in the UK bewer a chance to consider it. AB InBev said it was disappointed that SABMiller’s board rejected its previous offers without meaningful discussion and that it had made its latest approach public to give shareholders in the UK brewer a chance to consider it.
SABMiller announced on 15 September that AB InBev had approached it about a takeover to create a company worth about £180bn. Under UK takeover rules, AB InBev was given until 14 October to make a firm offer or walk away unless SABMiller asked for the deadline to be extended.SABMiller announced on 15 September that AB InBev had approached it about a takeover to create a company worth about £180bn. Under UK takeover rules, AB InBev was given until 14 October to make a firm offer or walk away unless SABMiller asked for the deadline to be extended.
Carlos Brito, AB InBev’s chief executive, said: “We had interaction with their board and chairman on a private basis. We were disappointed that they rejected both offers. There was no meaningful engagement with them which is why we thought it was time for the shareholders to get to know what was being discussed.” Brito said: “We had interaction with their board and chairman on a private basis. We were disappointed that they rejected both offers. There was no meaningful engagement with them which is why we thought it was time for the shareholders to get to know what was being discussed.”
AB InBev said it had devised an alternative to its cash offer, available to all shareholders, for payment partly in cash and partly in shares to suit Altria and BevCo.AB InBev said it had devised an alternative to its cash offer, available to all shareholders, for payment partly in cash and partly in shares to suit Altria and BevCo.