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| SABMiller recommends revised AB InBev takeover offer | SABMiller recommends revised AB InBev takeover offer |
| (about 3 hours later) | |
| Brewing giant SABMiller has recommended that its shareholders should accept the revised takeover offer from AB InBev. | Brewing giant SABMiller has recommended that its shareholders should accept the revised takeover offer from AB InBev. |
| Budweiser owner AB InBev raised its offer for rival SABMiller on Tuesday after a fall in the pound had made its original terms less attractive. | Budweiser owner AB InBev raised its offer for rival SABMiller on Tuesday after a fall in the pound had made its original terms less attractive. |
| The pound has lost about 12% against the dollar since the UK referendum. | The pound has lost about 12% against the dollar since the UK referendum. |
| The deal, agreed last year, will create the world's largest beer firm, producing about 30% of the world's beer. | The deal, agreed last year, will create the world's largest beer firm, producing about 30% of the world's beer. |
| In another important development on Friday, the deal was given the go-ahead by Chinese regulators, a major hurdle to overcome before any deal could go ahead. | In another important development on Friday, the deal was given the go-ahead by Chinese regulators, a major hurdle to overcome before any deal could go ahead. |
| 'Difficult' | 'Difficult' |
| AB InBev raised its offer by £1 a share to £45 a share, valuing SABMiller at about £79bn, up from £70bn previously. | AB InBev raised its offer by £1 a share to £45 a share, valuing SABMiller at about £79bn, up from £70bn previously. |
| SABMiller counts Peroni, Pilsner Urquell, and Grolsch among a stable of brands, while AB InBev also produces Stella Artois, Corona, Leffe and Beck's. | |
| SABMiller chairman Jan du Plessis said: "The board's decision was difficult given changes in circumstances since the board originally recommended £44 per share in cash last November. | SABMiller chairman Jan du Plessis said: "The board's decision was difficult given changes in circumstances since the board originally recommended £44 per share in cash last November. |
| "Since then, various factors have affected the value of the offer, most importantly the impact of the Brexit vote on the value of sterling and the re-rating of comparable companies. | "Since then, various factors have affected the value of the offer, most importantly the impact of the Brexit vote on the value of sterling and the re-rating of comparable companies. |
| "This has made the board's decision more challenging, and we believe the final cash consideration of £45 per share to be at the lower end of the range of values considered recommendable." | "This has made the board's decision more challenging, and we believe the final cash consideration of £45 per share to be at the lower end of the range of values considered recommendable." |
| Less attractive | Less attractive |
| The way in which the offer is structured means that investors can receive either cash, or a mixture of cash and shares in the newly-merged company - a partial share agreement (PSA) as it is known. | The way in which the offer is structured means that investors can receive either cash, or a mixture of cash and shares in the newly-merged company - a partial share agreement (PSA) as it is known. |
| However, the PSA was designed specifically for SAB's two biggest shareholders Altria and Bevco, who wanted to keep a stake in the new company. | However, the PSA was designed specifically for SAB's two biggest shareholders Altria and Bevco, who wanted to keep a stake in the new company. |
| Since last November, when the merger was agreed, the cash offer has become less attractive given the weaker value of the pound. | Since last November, when the merger was agreed, the cash offer has become less attractive given the weaker value of the pound. |
| However, Aberdeen Asset Management, an SABMiller shareholder, has again said that the deal is unacceptable. | However, Aberdeen Asset Management, an SABMiller shareholder, has again said that the deal is unacceptable. |
| On Friday it said that, "as we have already indicated, we intend to vote against the deal as we are uncomfortable with the structure and believe it undervalues the company". | On Friday it said that, "as we have already indicated, we intend to vote against the deal as we are uncomfortable with the structure and believe it undervalues the company". |