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SABMiller shareholders said to support AB InBev offer

Johannesburg - Major SABMiller shareholders have signaled they favour Anheuser-Busch InBev’s revised $102bn takeover offer as the board prepares to meet in the coming days to vote on whether it supports the deal, according to people familiar with the process. 

Investors including Allan Gray, Davidson Kempner Capital Management and Elliott Management Corp. are among those prepared to back the offer, said the people, who declined to be named because the details aren’t public. Many shareholders view the takeover’s potential collapse as a larger risk than accepting an offer that falls short of their expectations after AB InBev said its improved offer is final, the people said.

AB InBev this week raised its cash offer by one pound a share to £45 and also increased the amount of cash for shareholders who choose a cash-and-stock alternative. SABMiller managers asked employees to halt integration work, knitting together the makers of brands including Budweiser, Beck’s and Aguila, while they review the new offer. CEO Alan Clark said in an internal memo that “there should be no contact with AB InBev with immediate effect.”

SABMiller needs the approval from holders of 75% of its shares if the board recommends the offer. Representatives for ABI and SAB declined to comment.

TCI Fund Management, Davidson Kempner and Elliott Management had asked SABMiller to reconsider AB InBev’s bid in the aftermath of the UK’s decision to leave the European Union last month, saying it was much less attractive following the pound’s plunge, people familiar with the matter said previously.

SABMiller shareholder Aberdeen Asset Management Plc has said the revised offer undervalues the company and remains unacceptable.

If the deal doesn’t close, AB InBev would need to book a loss of about $10bn based on the fall of the pound, according to Susquehanna International Group analyst Pablo Zuanic. If SABMiller walks away, it loses a breakup fee of $3bn. SABMiller’s shares could also fall below £40 if the deal collapses, from about £43 Thursday, according to analyst estimates.

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