SABMiller reportedly reject informal offer from rival AB InBev
SABMiller has rejected an informal takeover bid of £66.4bn ($100bn) from its rival Anheuser-Busch InBev’s, citing the offer as too low according to reports.
AB InBev’s initial proposal made last week was worth around £40 a share. The Peroni brewer turned down the deal after executives and shareholders said £45 a share represented a more accurate valuation of the company, meaning AB InBev would need to table a £73bn offer.
The London-based SABMiller saw its shares fall by as much 3.9 per cent following the news while AB Inbev’s shares remained largely unchanged.
Fears that the Belgian producer of Budweiser and Stella Artois could walk away from the deal could be behind SABMiller’s decision to release a surprise trading update nine days earlier than planned. The update announced that beer volume's for the brewer had returned to growth in the second quarter, helped by Africa and Latin America, and so could convince AB InBev that it was worthy of an increased offer.
A successful takeover would result in the creation of one of the largest brewers in the world, accounting for close to a third of the world’s beer production. It continues a decade long trend of large mergers in the industry, a trend responsible for the dominance of AB InBev itself which is controlled by a group of wealthy Brazilian investors led by Jorge Paulo and is the result of mergers between Belgian, American, and Latin American brewers.
According to Bloomberg Business AB InBev has been lining up lenders including Bank of America Corp. and Banco Santander SA to accumulate around $70bn to finance for the proposed takeover.
Under U.K. takeover rules, AB InBev has until 5pm on 14 October to make its formal offer or announce that it is pulling out of the deal however SABMiller could ask regulators for a deadline extension.