SABMiller rejects £65 billion takeover offer from AB InBev

SABMiller’s biggest shareholder, U.S. tobacco giant Altria Group, said it supports the current proposal, including the share alternative, and recommended that SABMiller’s management engage “promptly and constructively” in talks.

The Budweiser maker bid 42.15 pounds a share in cash for its nearest competitor, whose brands include Peroni and Grolsch.

In a statement issued on Thursday – after SABMiller said the offer was too low – AB InBev noted the rejection – by all directors expect those nominated by SABMiller’s largest shareholder, Altria – is not based on credible facts.

Yesterday morning, AB InBev said it had made an offer to SABMiller, which would value to company at around $103.6bn / £68bn. The company has even gone so far as to create a fancy corporate website espousing the virtues of the deal, complete with corporate video of CEO Carlos Brito making the case.

“We’re in SAB largely because we thought there was a chance that this could happen”, Maxwell said in a phone interview.

“In our opinion, there is a strong strategic and financial rationale for a merger of AB InBev and SABMiller and we believe that 42.15 (pounds a share) is an attractive offer for SABMiller shareholders”.

When it announced its offer, AB InBev was optimistic about its appeal to the SABMiller shareholders.

It said the offer “very substantially undervalues” the company.

“AB InBev needs SABMiller but has made opportunistic and highly conditional proposals, elements of which have been deliberately created to be unattractive to many of our shareholders”, said Jan du Plessis, chairman of SABMiller.

In a Wednesday news release, Altria said it supports A-B InBev’s bid and that it would take the alternative offer. AB InBev sold 459 million hectoliters.

The bid by the world’s top beermaker to buy its biggest rival is the most ambitious step yet for AB InBev, which has a long history of acquisitions.

AB InBev also said it planned to establish a secondary share listing and regional headquarters in Johannesburg, where SABMiller has a secondary listing, which local investors have said they want retained.

The Belgian brewer pointed out that the proposal represents a premium of approximately 44% to SABMiller’s closing share price on September 14, the last day before speculation about ABI’s takeover approach emerged. Together, AB InBev and SABMiller sell more than 30 per cent of the world’s beer volume.

The transaction would be the biggest of 2015 – already a bumper year for dealmaking – and the fourth-largest takeover ever, according to data compiled by Bloomberg.