AB InBev ups offer for SABMiller as deadline looms

Mon Oct 12, 2015 4:19pm EDT
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By Martinne Geller and Philip Blenkinsop

LONDON/BRUSSELS (Reuters) - Anheuser-Busch InBev (ABI.BR: Quote) raised its proposed takeover offer for SABMiller SAB.L on Monday, as the world's largest brewer tries to win over its smaller rival to the idea of creating a giant that would make nearly a third of the world's beer.

The maker of Budweiser and Stella Artois said it would offer 43.50 pounds per share in cash to most SABMiller shareholders, an improvement from the 42.15 pounds it put forward last week.

Under UK takeover rules, AB InBev has until 1600 GMT (12 p.m. EDT) on Wednesday to launch a formal bid for SABMiller, which would rank as the biggest British company takeover at 67 billion pounds ($103 billion). SAB can ask the takeover panel for an extension if it wants to continue discussions.

Monday's sweetened offer is the fourth, following rejections of cash offers at 38, 40 and 42.15 pounds per share.

Three of SAB's top 10 shareholders had spoken out in support of the board rejecting the previous offer, which SABMiller said "very substantially" undervalued the company.

SAB declined to comment on the new offer, but a source close to the situation said the board would review the new proposal and respond as appropriate. The SAB board was meeting late on Monday, according to Bloomberg and the Telegraph.

Shares of SAB, maker of beers including Peroni and Grolsch, closed down 1.3 percent at 36.67 pounds, as some investors worried the parties were still too far apart to agree to a deal.

"The last reaction from SAB was that the previous offer was significantly undervaluing it," said Morningstar analyst Phil Gorham. "The latest offer is not a significant improvement."   Continued...

A woman carries beer produced by brewing company SAB Miller past kegs at a bar in Cape Town, September 16, 2015.  REUTERS/Mike Hutchings