Anheuser-Busch Cos Inc plans to reject InBev NV's unsolicited $46.3 billion takeover offer, saying it undervalues the company, a source familiar with the situation said. Anheuser-Busch, the brewer of Budweiser beer, and InBev, the maker of Stella Artois and Beck's, could not be immediately reached for comment.
In rebuffing InBev's offer, Anheuser-Busch plans to map out its own restructuring plan soon that would include the sale of the company's theme park operations, The Wall Street Journal reported. The plan also would include layoffs, more than $500 million in cost-cutting efforts and the sale of Anheuser-Busch's packaging unit, the New York Times added.
The timing of Anheuser-Busch's restructuring announcement was not clear, but the source said the company's board viewed InBev's $65-per-share offer as too low. The source declined to be identified by name because the source was not authorized to speak to the media. Pirko said a rejection from Anheuser sets the stage for InBev to either raise its bid or take its bid directly to shareholders — options he said InBev is likely to pursue.
Analysts had speculated InBev may have to raise its offer by more than $3 billion, to around $70 a share, to woo its shareholders into a deal to create the world's largest brewer, making a quarter of the world's beer. InBev is prepared to take its bid directly to Anheuser-Busch shareholders through a tender offer, the Wall Street Journal said. InBev has yet to decide whether to pursue such a course, however.
Anheuser-Busch has few takeover defences to thwart a hostile offer, making it feasible for an unwanted suitor to acquire the company. InBev on Wednesday prodded Anheuser-Busch by saying it remained available to discuss the bid, but stressed that time was “of the essence.”
InBev said it had commitment letters for the financing for the deal and has paid $50 million in commitment fees to a 10-bank lending group. It has been two weeks since the Belgian-Brazilian brewer launched its bid for Anheuser-Busch, but the maker of Budweiser and Michelob has yet to respond. Analysts have said that if Anheuser puts off negotiations for too long, InBev may just take its offer directly to shareholders in a hostile bid. That could be bad for Anheuser, analysts have said, since InBev's bid would give shareholders a significant premium that Anheuser would have trouble matching on its own.
The $65-a-share offer, which tops Anheuser's all-time high, is 24 percent higher than the stock's closing price the day before reports of merger talks surfaced, and 35 percent higher than the average share price over the preceding month.
