AB InBev ups offer for SABMiller after Brexit pound slump

BRUSSELS/LONDON, July 26 (Reuters) – Anheuser-Busch InBev raised its $100 billion-plus bid for rival brewer SABMiller on Tuesday in an attempt to quash investor dissent over an offer made less attractive by a post Brexit vote fall in the pound.

Shareholders in SABMiller will now receive £45 a share, up from its earlier offer of £44.

Following the United Kingdom’s approval of a referendum to exit the European Union, the pound’s value dropped relative to the dollar.

It also increased the amount of cash for shareholders who choose a cash-and-stock alternative.

However, a SABMiller shareholder, Aberdeen Asset Management, released a statement on Tuesday, claiming the revised deal was unacceptable because it undervalued the company, favoring Altria and Santo Domingo family of Colombia.

It also tweaked the terms of an alternative cash and stock structure designed for SABMiller’s two largest shareholders, raising the cash element by £0.88 per share.

Angry shareholders of London-based SABMiller were increasingly resisting the giant buyout, which before the Brexit vote was valued as much as US$121 billion.

The world’s biggest beer company, Anheuser-Busch InBev, bid $107 billion to buy the world’s second-biggest beer company, SABMiller.

AB InBev, a multinational Belgian-Brazilian company, was responding to complaints from activist shareholders.

This acquisition is important for AB InBev’s development. But the brewers are waiting for final approval from Chinese regulators and global shareholders.

AB InBev, which has hedged to cover the pounds initially required, said the revised terms were final. Because Altria and BevCo are opting to receive shares in addition to cash, the level of profitability lost from a merger (compared to the value of the deal in October) is not as severe.

AB InBev said its offer was about 53% higher than SABMiller’s closing share price of £29.34 on September 14 2015 “prior to renewed speculation of an approach” from it. It will be interesting to see whether or not the offer becomes adjusted to make the deal sweeter for smaller shareholders. Under the terms of the partial share deal, investors must hold on to the stake for a minimum of five years.

The Board of SABMiller confirms that last week it engaged Centerview Partners to provide additional financial advice alongside that of its existing financial advisers.