LEUVEN, Belgium — Anheuser-Busch InBev has confirmed recent speculation, saying that it has made an improved proposal to the board of SABMiller plc to combine the two brewing companies. AB InBev’s latest proposal–its fourth–is a cash offer of £43.50 ($66.77 U.S.) per share, with a partial share alternative available for approximately 41% of the SABMiller shares.
AB InBev’s first proposal to SABMiller’s board on September 17 was £38 ($58.16 U.S.) per share, and it revised it to £40 ($61.22 U.S.) per share and then to £42.15 ($64.51 U.S.) per share.
“The improved proposal does not constitute an offer or impose any obligation on AB InBev to make an offer, nor does it evidence a firm intention to make an offer,” the company said. “There can be no certainty that a formal offer will be made.”
In accordance with U.K. Takeover Panel mergers and acquisition codes, AB InBev must, by not later than 5 p.m. on Oct. 14, 2015, either announce a firm intention to make an offer for SABMiller or announce that it does not intend to make an offer for SABMiller.
At posting time, SABMiller has not responded officially to the new proposal. Its last official statement was the rejection of AB InBev’s third proposal on October 7.
The partial-share alternative is designed to appeal to SABMiller’s two largest shareholders, cigarette maker Altria Group Inc., which holds about 27%, and the Santo Domingo family of Colombia, which holds about 14% through its BevCo Ltd. investment vehicle, reported The Wall Street Journal. The alternative offers both holders tax and accounting advantages, along with the opportunity to keep a stake in the combined company, the report said.
“We think the most likely scenario is that the increased proposal brings SAB’s board more meaningfully to the negotiating table, and SAB’s board asks for an extension” of the deadline, Evercore ISI analyst Robert Ottenstein told the newspaper.
Some analysts have speculated that the Belgian brewer would have to go as high as £45 a share for the all-cash component of the deal for SABMiller to accept the offer, said the Journal.
SABMiller plc is a multinational brewing and beverage company based in London. Its beers include Miller Lite, Peroni and Pilsner Urquel.
Anheuser-Busch InBev is a multinational beverage and brewing company based in Leuven, Belgium. Its beers include Budweiser, Michelob, Corona, Stella Artois, Hoegaarden and Skol.