LONDON, United Kingdom. The owner of Budweiser is making a fresh attempt to clinch the biggest-ever foreign takeover of a British-based company with a fresh proposal to buy SABMiller valuing it at around £70bn.
Sky News has learnt that Anheuser-Busch InBev made a renewed overture to SABMiller’s board on Monday.
The exact price that AB InBev is proposing to pay – in its fourth takeover approach to the owner of Grolsch and Peroni – was unclear on Monday lunchtime, although market sources indicated that it would be at around £43.50-a-share, or midway between a £43-a-share and £44-a-share range indicated in media reports at the weekend.
That would value SABMiller at more than the £42.15-a-share rejected by SABMiller’s board last week as “substantially undervaluing” the company.
However, it was unclear whether it would be sufficient to persuade the FTSE-100 brewer to enter formal talks or whether it would win the explicit backing of Colombia’s billionaire Santo Domingo family, which owns a 14% stake.
The approach was being made privately by AB InBev in the hope of persuading SABMiller to engage in discussions, according to people close to the situation.
The fresh proposal comes just two days before a Takeover Panel deadline to lodge a formal bid, and follows a mixed response to its £42.15-a-share offer dismissed by SABMiller last week.
Three of the leading shareholders in SABMiller have urged its board to seek a higher price from the AB InBev board, while Altria, which holds 27% of the London-listed company, has demanded that it engage with its suitor.
“Aberdeen [Asset Management] supports the board of SABMiller in its decision to reject a deal at the proposed price of £42.15,” the fund manager said on Friday.
“While we can see the potential benefits of a merger between the two companies we believe the public offer from AB Inbev significantly undervalues SABMiller and its long-term potential.”
“Shareholders considering the current offer should keep in mind a number of attributes that make this company a unique asset: the quality of its brands and operations; its scale and dominant position in each of its major markets; the enormous growth potential of its African business in particular; and its best-in-class management team,” it added.
If AB InBev does not announce a firm offer for its London-listed rival by 5pm on Wednesday, it would have to abandon its interest for at least six months.
SABMiller could request an extension to that deadline from the UK’s Takeover Panel, although the current level of friction between the two sides reduces the likelihood of that happening.
For tax purposes, Altria and BevCo – a vehicle of the Santo Domingo family – would have the option of receiving some of the proceeds in AB InBev shares.
BevCo has so far declined to comment publicly on its stance.
In a statement issued earlier on Friday, SABMiller announced a revised cost savings target from US$500m by 31 March 2018 to at least US$1.05bn by 31 March 2020.
Alan Clark, Chief Executive of SABMiller, said last week: “Our recent trading statement highlighted our accelerating growth in the second quarter.
“Another key plank of our strategy is to build a globally integrated organisation to optimise resource, win in market and reduce costs. The measures we are announcing today are a continuation of our existing cost saving programme.
“Whilst we are already a highly efficient business with strong EBITDA margins of 38% across our 20 largest managed beer markets, we are continuing to remove duplication across markets, bringing specialist expertise in areas like procurement under one roof, and standardising common processes.”
AB InBev and SABMiller both declined to comment.
Credit: Sky News
