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Time is ticking for AB InBev to make a formal offer for SABMiller

by , 12 October 2015

Anheuser-Busch InBev have until Wednesday to make a formal bid for SABMiller. The Belgium brewer has already made three informal bids for SABMiller, but with no success.

The Public Investment Corporation (PIC) has also waded in saying it backs the SABMiller board rejection of the latest offer.

But rumour has it that a higher bid could be on the table soon.

Let's take a closer look at what's going on…

The PIC support SABMiller’s offer refusal

The PIC, SABMiller’s fourth biggest shareholder, also turned down AB InBev’s latest offer “as too low,” reports Fin24. This puts further pressure on the Belgium brewer to raise its bid.

The PIC, with a 3% holding in SABMiller, said it has “confidence in the board,” says BDLive.

On 7 October, SABMiller rejected an informal bid by AB InBev of £42.15 per share.

But now people close with the matter say there’s a chance AB InBev will raise its offer to around £43 a share, reports Bloomberg. SABMiller reportedly wants “closer to £45 a share”.

Both companies have declined to comment on the rumours, adds Bloomberg.

Time is running out for AB InBev to make a formal offer

AB InBev has until 5pm on Wednesday to make a formal offer for SABMiller, notes MoneyWeb. This gives AB InBev time to put in a higher bid.

Another concern the PIC has is about a secondary listing of the merged brewer on the JSE, adds Fin24. Dan Matjila, CE of the PIC, says AB InBev would have to provide “more details”.

SABMiller says the bid has been “opportunistic” as the brewer saw a “double digit decline in its share price in July and August, depressed by weaker emerging market currencies,” says IOL. Phil Gorham, an analyst with Morningstar, said AB InBev “saw an opportunity and they jumped on it”.

With just over two days until the deadline, time will tell if AB InBev will make a higher formal offer for SABMiller. And if so, if the board at SABMiller accept it.

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Time is ticking for AB InBev to make a formal offer for SABMiller
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