Many Anheuser-Busch (BUD) shareholders, including Warren Buffet, believe the $65/share acquisition offer from European beer-maker InBev is more than fair. However, the Busch family seems reluctant to let go of the company they no longer really own.
Last week, BUD initiated merger talks with Grupo Modelo, Mexico’s #1 brewer. BUD already owns 50% of the company, but possible motivations for the talks range from potential sabotage of the takeover deal to wringing more money out of InBev. Yet, InBev is (politely) having none of it (Reuters):
In a letter dated Sunday, Inbev’s Chief Executive Carlos Brito told Anheuser-Busch’s CEO August Busch IV that he was committed to a “friendly combination.”
But he said: “We have read the recent press reports suggesting that you may have approached Grupo Modelo regarding a possible transaction between Anheuser-Busch and Grupo Modelo or affiliated entities.”
He said it was important that Anheuser-Busch understood that Inbev’s offer was “made on the basis of Anheuser-Busch’s current assets, business and capital structure.”
“Accordingly, we would expect that prior to proceeding with any alternative transaction, especially if your shareholders will not be given the opportunity to vote on it, you would first fully explore our offer and the potential adverse consequences any such transaction could have on the ability of your shareholders to receive our premium offer,” he said.
So far, this dance is following a standard script. BUD’s next move (behind the scenes) will likely be to say to InBev, “$65 is a bit light. If you don’t want us to talk to Grupo Modelo, raise your bid to $75 and we’re done.” InBev’s stock is still up from the when the offer was confirmed, so the company has room to increase the bid.
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