Proxy voters back megabrew deal

THE vast majority of SABMiller shareholders voting by proxy supported the $104bn offer from Anheuser-Busch InBev (AB InBev), according to Bloomberg reports.

The deadline for the proxy votes was on Monday, two days ahead of Wednesday’s shareholder meeting, which is expected to be the very last time SABMiller shareholders will gather. Assuming the transaction is approved, SABMiller’s listing, which is the oldest on the JSE, will be suspended on Friday and the company delisted on October 5.

Depending on whether the hedge funds vote — they are reported to have built up a 20% stake — it is possible that as few as 7.5% of the SABMiller shareholders could block the deal. If 100% of the shareholders entitled to vote do so, including hedge funds, then a blocking vote of 15% will be needed.

An SABMiller spokesman could not comment on speculation about the proxy voting. An announcement would be made after Wednesday’s meeting.

To date, Aberdeen Asset Management, which holds a 1.6% stake, is the only significant shareholder to indicate it is unhappy with the transaction, the largest in South African corporate history. Proxy advisers Glass Lewis and Institutional Shareholder Services have recommended that shareholders support the transaction.

If the deal does go through, South African shareholders who opted for cash can expect payment between October 11 and 13. The end-August register revealed shareholders based in SA held 13.8% of the group, which means just more than $14bn could flow into SA. This compares with nonspeculative trade in the foreign exchange market of about $2bn a day.

Expectations of the huge inflow have played a role in the rand’s recent strong performance. It has gained 8.9% in September, the strongest of 31 major emerging market currencies tracked by Bloomberg.

Mohammed Nalla, head of strategic research, global markets at Nedbank Corporate and Investment Banking, agreed that evidence suggested some of the recent strength in the rand could be attributed to the SABMiller deal. “A deal of this magnitude would require hedging over an extended period in order to ensure that it was not done in a disorderly manner, which could upset the normal functioning of the markets.”

Nalla said the window for the hedging was between September 19 (the last transfer of shares from SA to the UK registry) and October 9 (the day before the expected final merger date).

Reserve Bank deputy governor Daniel Mminele said when there were significantly large transactions in the past, the Bank had engaged the parties to see how the transactions could be executed with minimum market disruption. In some cases, the Bank had purchased forex directly from counterparties and added the proceeds to its reserves.