SABMiller shareholders said to support new AB InBev offer

Major SABMiller Plc shareholders have signalled they favour AnheuserBusch InBev NV’s revised $102-billion (U.S.) takeover offer as the board prepares to meet in the coming days to vote on whether it supports the deal, according to people familiar with the process.

Investors including Allan Gray Ltd., Davidson Kempner Capital Manage- ment and Elliott Management Corp. are among those prepared to back the offer, said the people, who asked not to be named because the details aren’t public. Many shareholders view the takeover’s potential collapse as a larger risk than accepting an offer that falls short of their expectations after AB InBev said its improved offer is final, the people said.

AB InBev this week raised its cash offer by one pound a share to 45 pounds and also increased the amount of cash for shareholders who choose a cash-and-stock alternative. SABMiller managers asked employees to halt integration work, knitting together the makers of brands including Budweiser, Beck’s and Aguila, while they review the new offer. Chief Executive Officer Alan Clark said in an internal memo that “there should be no contact with AB InBev with immediate effect.”

“It seems that AB InBev’s improved and final bid has led others to recog- nize there was value in the price offered,” Tom Russo, who manages $10 billion for Gardner Russo & Gardner, including $800 million worth of AB InBev stock, said in an interview. “I think the combination can release a significant amount of cost overlaps; there’s an industrial argument and a commercial argument behind the transaction.”

SABMiller needs the approval from holders of 75 per cent of its shares if the board recommends the offer.