SABMiller takeover turns frosty

On Wednesday, ABI proposed that it acquire its smaller rival for £42.15/share, and for the equivalent of £37.49 if one accepted a cash and shares offer.

ABI made its proposal public, but the SABMiller board rejected the bid out of hand, as they had done with the two previous, private offers.

ABI said it was “surprised” that the SABMiller board could suggest that the proposal “very substantially undervalues SABMiller”.

This lacks credibility, ABI said in a statement. For one, the cash proposal came in at a 44% premium to the last closing share price ahead of the deal becoming public. The Altria Group, one of SABMiller’s biggest shareholders, has publicly supported the proposal and has urged the board to engage promptly and constructively with ABI.

ABI also took exception to SABMiller’s suggestion that the proposals were “highly conditional”, and provided little comfort on issues such as the regulatory hurdles in the US and China. “Together with its advisers, AB InBev has done significant work on regulatory matters and has identified solutions that provide a clear path to closing.”

ABI, the statement said, has repeatedly offered to share this analysis with SABMiller and its advisers. Each time the board of SABMiller has refused to engage.

With Altria on it side, ABI is now focusing its attention on SABMiller’s shareholders, rather than the board. Addressing shareholders directly, ABI CEO Carlos Brito asked, “How long will it be before shareholders see a value of over £42 in the absence of an offer from AB InBev?

“If shareholders agree that we should be in proper discussions, they should voice their views and should not allow the board of SABMiller to frustrate this process and let this opportunity slip away, ” Brito said.

He has already begun lobbying shareholders big and small, from the Santo Domingo family with its 15% stake to the PIC with 3%.

Brought to you by Moneyweb