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SABMiller boost lifts All-share, Top 40 indices

Johannesburg - A jump of nearly 20% in the share price of SABMiller [JSE:SAB] pulled the JSE's All-share index more than 1 000 points higher on Wednesday morning.

The share price rocketed upwards in London and Johannesburg after it became known that Anheuser-Busch InBev, the world’s largest brewer by sales, had approached SABMiller to explore a tie-up that would create a company with a market capitalisation of about $250bn. 

READ: Global beer leader AB InBev to make offer for SABMiller

By midday on Wednesday SABMiller was 19.5% higher on a new record of R746.29, after it traded as high as R772.52 in earlier trade. It smashed the previous record of R680.45. Wednesday morning’s sharp jump followed after the share price had hardly moved lately, losing more than 7% over the past seven days.

More than 3 million SABMiller shares were sold in morning trade for over R2.95bn.

SABMiller’s sharp jump, with a little help from Richemont [JSE:CFR] which reported strong sales figures, helped the Industrial index gain 4.56% by midday. That boosted the All-share-index and Top 40 indices which gained more than 2%, but all the other major indices were lower on the eve of the US Federal Reserve’s meeting on interest rates which starts later on Wednesday.

By midday the All-share index was 2.42% higher at 50 690 points and the Top 40 index traded 2.90% higher at 45 262 points, smashing an important resistance level of 44 380 points.

Financial shares however lost 0.13%, the Resources index was 1.42% softer and the Gold index traded 1.66% lower.
SABMiller said in a statement that it had been informed that Anheuser-Busch InBev intended to make a bid proposal for the company.

“No proposal has yet been received and the board of SABMiller has no further details about the terms of any such proposal,” it said. “The board of SABMiller will review and respond as appropriate to any proposal which might be made.

“There can be no certainty that an offer will be made or as to the terms on which any offer might be made. In the interim, shareholders are strongly advised to retain their shares and to take no action.”

The Industrial index received another push from Richemont, which traded 5.73% higher at R105.24 by midday after losing almost 9% over the past 30 days. The share price was at one stage more than 7.5% higher, its steepest intraday gain in two years, on news that sales growth accelerated as weaker currencies attracted big-spending tourists to Japan and Europe.

Sales increased 4% excluding currency shifts in the five months through August, the company said on Wednesday.

Analysts expected a 1% gain, according to the median estimate in a Bloomberg survey. Sales rose 48% in Japan and 26% in Europe, offsetting an 18% decline in Asia-Pacific.  

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