InBev improves SABMiller bid

BREXITIMPACT: World’s largest brewer to offer £45 a share for rival, tweak terms of alternate share-and-cash structure

ANHEUSER-Busch InBev raised its US$100 billion-plus (RM406 billion-plus) bid for rival brewer SABMiller yesterday after a slide in the value of the pound following the Brexit vote made the offer less attractive for many investors, threatening to derail the deal.

SABMiller said its chairman had talked with his counterpart at AB InBev on Friday about the offer in the light of exchange rate volatility and market movements.

The world’s largest brewer will now offer £45 (RM240) a share for its nearest rival, an increase from the £44 announced in October last year.

It has also tweaked the terms of an alternative share-and-cash structure designed for SABMiller’s two largest shareholders, raising the cash element by £0.88 a share.

The offer values SABMiller at around £79 billion. In November, when the original bid was officially launched, it was worth around £70 billion, or US$106 billion based on exchange rates at the time.

AB InBev, which has hedged to cover the pounds initially required, said the revised terms were final.

SABMiller, which provisionally agreed the deal struck in October, said it would consult with shareholders, with a further announcement after that.

The takeover is still awaiting regulatory approval in China. SABMiller shareholders would expect to vote on it after that.

The changes come after a number of activist investors, such as Elliott, bought stakes in SABMiller and several shareholders voiced concerns at least week’s annual general meeting that the cash deal was less attractive for many investors than before and, in any case, below the share-andcash alternative.

The latter, designed exclusively for Altria and Colombia’s Santo Domingo family who together own about 41 per cent of SABMiller, had been worth less than the all-cash option last year, but with the fall of sterling and a rise of AB InBev shares, had surpassed it since.

The pound has dropped some 12 per cent versus the US dollar since the British referendum vote to leave the European Union. AB InBev shares are more than 35 per cent higher than October.

AB InBev said the share-and-cash offer value was now £51.14, so above the £45 of pure cash, but the new shares offered would have to be held for at least five years.

“I wouldn’t like to second guess what the activists were hoping for, but the increase is quite modest,” said a SABMiller shareholder. Reuters