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Johannesburg - Anheuser-Busch (AB) InBev raised its proposed takeover bid for SABMiller [JSE:SAB] to about £67.4bn (R1.37trn) seeking to bring the London-based brewer to the negotiating table for a deal that would create the world’s dominant beer maker.
Under the proposal, the majority of stockholders would be offered £43.50 a share in cash, AB InBev said in a statement. SABMiller’s two biggest investors, Altria Group and BevCo, the Santo Domingo family’s holding company, would receive £38.88 a share in cash and stock, AB InBev said.
SABMiller spurned three previous proposals, the most recent of which AB InBev made public on October 7. That potential bid, of £65.2bn, “substantially undervalues” the company, SABMiller has said. The previous bid valued the majority of the shares at £42.15 in cash, while the Altria and BevCo stakes were valued at £37.49.
Shareholders piling pressure on AB InBev
Earlier on Monday, three of SABMiller's top 10 shareholders have spoken out in support of the brewer's board spurning AB InBev's takeover offer, piling pressure on the maker of Budweiser to raise its bid.
Investors were expecting an improvement to AB InBev's last offer, which at the previous £42.15 per share in cash for most shareholders was rejected by SABMiller as "very substantially" undervaluing the company.
AB InBev has until 1600 GMT on Wednesday to launch a formal bid for the maker of Peroni and Grolsch, in what would be the biggest UK company takeover ever. It has already made three informal offers, which were rejected by SAB's board excluding the three directors nominated by cigarette maker Altria Group.
SABMiller has not yet responded to the latest offer.
South Africa's Public Investment Corporation (PIC), Poland's Kulczyk Holding and Scotland's Aberdeen Asset Investments - respectively SABMiller's fourth, fifth and seventh-largest shareholders - have all publicly sided with SABMiller. Altogether their holdings account for 8.2% of the company.
"We have confidence in the board and we will rely on their judgment. They have said the price is too low and we agree with them," Dan Matjila, chief executive of PIC, told Reuters.
On Friday, Aberdeen called the offer "welcome", but said that "AB InBev need to rethink their numbers".
Colombia's Santo Domingo family crucial to takeover
Still unclear is the ultimate position of Colombia's Santo Domingo family, which owns 14% of the company following the sale of their Grupo Bavaria business to SABMiller in 2005.
Their two board representatives who voted against last week's offer are Alejandro Santo Domingo and Carlos Alejandro Perez Davila, cousins who also run New York-based Quadrant Capital Advisors.
Yet Alejandro Santo Domingo, the Harvard-educated fixture of New York high society, is according to media reports well-acquainted with AB InBev's controlling shareholders, including Brazilian billionaire Jorge Paulo Lemann.
"We think the Colombians are very close to Lemann and that Lemann knows exactly what price the Colombians want," said an SAB shareholder with a less than 1% stake. "I can't understand their tactics though."
AB InBev CEO Carlos Brito said last week that his company's large shareholders had approached Altria and the Santo Domingos and understood them to be "at least receptive to an approach".
He also said the structure of his alternative offer to buy the 41% of the company they own for a mix of shares and cash, was created "with and for" Altria and the Santo Domingos.
Santo Domingo could not immediately be reached by Reuters for comment. He told the Financial Times last week that "at the moment we have no comment".
The smaller SAB shareholder, who was not authorised to speak to the press, said he could see merits in a merger and hoped discussions would continue to find a price that was acceptable to Santo Domingo.
"It makes so much sense to put these two businesses together, but they clearly have to negotiate and get the best price," the shareholder said. And at the moment, they need to get the Colombians on board."
