SABMiller backs AB InBev offer for biggest-ever consumer takeover

Fri Jul 29, 2016 1:33pm EDT
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By Martinne Geller and Philip Blenkinsop

LONDON/BRUSSELS (Reuters) - The board of brewer SABMiller SAB.L will recommend its shareholders approve a sweetened takeover offer by Anheuser-Busch InBev (ABI.BR: Quote), the company said on Friday, capping a week of high drama about the fate of the consumer industry's biggest-ever merger.

The deal, worth 79 billion pounds ($104.9 billion), remains to be voted on by shareholders - a hurdle that could become harder to clear since the board intends to request that shareholders be divided into two classes, with each needing to approve the terms.

One prominent investor - Aberdeen Asset Management (ADN.L: Quote) - voiced opposition to the revised offer, saying it still undervalued the maker of beers including Castle Lager and Pilsner Urquell, which has a strong footprint in fast-growing markets of Latin America and Africa.

AB InBev added a pound-per-share to its cash bid on Tuesday to quash investor dissent over what would be the largest-ever takeover of a British company. Its earlier offer had been made less attractive by a sharp fall in sterling following Britain's vote in June to leave the European Union.

"The board's decision was difficult given changes in circumstances since the board originally recommended £44 per share in cash last November," said SAB Chairman Jan du Plessis. "We believe the final cash consideration of £45 per share to be at the lower end of the range of values considered recommendable."

"In reaching its decision, SAB's board considered the best interests of the company as a whole, taking into account all salient facts and circumstances," du Plessis said, adding that it had received extensive shareholder feedback.

Bernstein Research analyst Trevor Stirling said that at current exchange rates, he expects the deal to get approved.

"It's better than walking away," he said. "But if sterling falls another 5-10 percent then all bets are off."   Continued...

A glass with beer and a bottle of Corona are seen in this picture illustration November 5, 2015.   REUTERS/Dado Ruvic/Illustration/File Photo