Anheuser-Busch’s (BUD) $62+ share price suggests investors are betting InBev will raises its bid for BUD. However, for now, InBev is sticking to their prior offer of $65/share, saying the offer represents the “full and fair” value of the company. Considering the offer is 18% above BUD’s prior all-time high (set in October 2002), InBev has firm ground to stand on.
That said, this tactic by InBev is likely just a negotiating play. InBev said Tuesday the company was “surprised” to not hear from the Anheuser-Busch board before the offer was rejected. If InBev raised its bid simply because BUD CEO A. Busch IV had the balls to dismiss it out of hand, it would be raising it forever.
By standing pat, meanwhile, InBev is likely hoping that annoyed BUD shareholders will start putting pressure on The Fourth to start a dialogue with InBev. Meanwhile, InBev will ramp up the public “we’re going to go hostile” rhetoric while intimating privately, through its bankers, that if BUD does get serious, it might be able to scrounge up a few more dollars. InBev:
InBev’s strong preference is to enter into a constructive dialogue to achieve a friendly combination that comprehensively addresses the interests of all constituents…
At the same time, InBev remains committed to the combination and will pursue all available avenues that would allow Anheuser-Busch shareholders a direct voice in the process.
Complete BUD-InBev News and Analysis
Anheuser-Busch (BUD): Restructuring Plan Will Force InBev To Raise Bid (BUD)
Anheuser-Busch (BUD) Next Steps: InBev Threatens Hostile While Quietly Raising Bid (BUD)
Anheuser-Busch (BUD) To Reject InBev Offer: No Surprise, Just The Beginning (BUD)