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London - SABMiller [JSE:SAB] rejected an informal takeover offer from Anheuser-Busch InBev that it considered too low, according to people familiar with the matter.
The initial proposal to the brewer of Peroni and Foster’s beer, made last week, was worth slightly over £40 a share, while its executives and some shareholders regard a deal at closer to £45 as representing a fair value, the people said, asking not to be identified as details of the negotiations aren’t public.
A deal at £45 per share would value SABMiller at about £73bn, and would be the largest merger this year.
London-based SABMiller communicated to AB InBev the terms at which it would be willing to negotiate after the rejection, one of the people said. No final decision has been made on a potential formal offer, and it’s possible the Belgian producer of Budweiser and Stella Artois may walk away from a deal, they said.
Representatives for AB InBev and SABMiller declined to comment.
SABMiller on Tuesday released a surprise trading update nine days earlier than planned, in which it announced that beer volume had returned to growth in the second quarter, helped by Africa and Latin America - a trend that could figure into a sweetened offer from AB InBev.
If successful, the combination would create a dominant global player in the brewing industry, which has been realigned through a decade of increasingly large mergers, and attract heavy scrutiny from antitrust regulators around the world.
Controlled by a group of wealthy Brazilian investors led by Jorge Paulo Lemann, AB InBev is itself the result of deals to unite major Belgian, American, and Latin American brewers.
AB InBev had already reached out to Altria, SABMiller’s biggest shareholder, before it announced plans to make an approach for its rival, people with knowledge of the matter said on September 18.
It is lining up lenders including Bank of America and Banco Santander SA to arrange as much as $70bn in financing for its takeover proposal, people familiar with the matter said last week.
Under UK takeover rules, AB InBev has until 18:00 on October 14 to make an offer or announce it doesn’t intend to proceed. SABMiller may also ask regulators for an extension to that deadline.
