AB InBev makes improved SABMiller takeover offer

Meanwhile, employees of SABMiller may feel apprehensive about the decision by the company’s board to accept the takeover bid, said Johan Botes, director of employment practice at Cliffe Dekker Hofmeyr.

“AB InBev has paid a reasonably full price for SABMiller, which certainly passes a few of the merger benefits to SABMiller shareholders”, said takeover expert Professor John Colley from Warwick Business School in the UK.

Taking into account the discounted price of the share alternative, the new offer would involve AB InBev paying roughly 67 billion pounds ($US103 billion).

Target SABMiller has called the approach “opportunistic”, timed to take advantage of a double-digit decline in its share price in July and August, depressed by weaker emerging market currencies.

It will be hoping that its latest offer, which values SABMiller at 43.50 pounds a share – 3.2 percent more than its previous bid and 14 percent higher than its initial offer – will finally win the day.

But, the deciding factor is going to be this share alternative package, which was always designed specifically to get SAB’s two largest shareholders on board. “Somewhere around 45 is what would more or less make everyone agree”. Altria and BevCo Ltd. together hold about 41 percent of SABMiller shares.

Anheuser-Busch InBev the world’s larger brewer made another new approach on Monday to SABMiller with an offer that is improved, said a news report in the UK.

Prosiebensat 1 Media SE slid 0.3% to €44.81 after the Germany-based free television services provider agreed to acquire Sweden-based online travel group Etraveli Holding AB for about €235 million or $267 million from the private equity firm Segulah IV LP.

“It is a decent deal for both shareholders as AB InBev probably will extract the synergies and consolidate a declining market”, he said.

SABMiller attempted to acquire rival Heineken a year ago, but its advances were rebuffed.

Brewer AB InBev has a stable of more than 200 beers, including Corona, Beck’s, Leffe and Hoegaarden. AB InBev Chief Executive Officer Carlos Brito countered by saying the board’s opposition lacks credibility and shareholders are being offered a price the brewer alone won’t achieve anytime soon. If it doesn’t bid it can’t renew its takeover effort for six months. The improved proposal comprises GBP43.50 per share, with a “partial share alternative” of just under half a share in ABInBev plus GBP3.56 in cash.

The company added that it expects most SABMiller shareholders, other than Altria Group, Inc. and BevCo Ltd., would wish to elect for the cash offer.

“It’s well-known that the management is not as stable as it used to be”, said Berenberg analyst Javier Gonzalez Lastra.