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SABMiller snubs AB InBev for a third time

by , 08 October 2015

Yesterday afternoon, SABMiller announced that it was rejecting the third informal bid made by Anheuser-Busch InBev.

So what's going on?

Let's take a closer look…

SABMiller’s board believes the latest offer still falls short

SABMiller [JSE:SAB] rejected AB InBev’s latest offer of £42.15 a share, reports Fin24. The board says the offer “still very substantially undervalues” the company.

SABMiller is “confident that it occupies an unassailable position in emerging markets,” says MoneyWeb. And it looks like the brewer believes an offer needs to be much higher.

Jan du Plessis, the chairman of SABMiller, says the company is in a unique position “to continue to generate decades of standalone future volume and value growth” for its shareholders from emerging markets, notes iAfrica. He believes “AB InBev needs SABMiller,” but its offers don’t reflect this.

SABMiller think AB InBev have taken advantage of the company’s “recently depressed share price,” adds Fin24. And the proposals also discriminate “against the substantial proportion of SABMiller shareholders, who may not be able to hold unlisted shares”.

There’s the chance of a hostile takeover of SABMiller

With SABMiller rejecting an offer for the third time, there is a chance of a hostile takeover, says BDLive. In this case, AB InBev would approach the shareholders of SABMiller directly “with an offer for their stock”.

AB InBev now has until next Wednesday to make “a firm and binding offer,” adds BDLive. This is down to “merger rules governing companies in the UK, where SABMiller is headquartered and has a primary listing”.

If the deal does end up going through, it would be the largest of the year so far, says Bloomberg. It would create a company earning “$25 billion before interest, taxes, depreciation and amortisation in 2016”.

Time will tell if AB InBev make a formal offer before Wednesday’s deadline.

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SABMiller snubs AB InBev for a third time
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