SABMiller rejects AB InBev's latest offer

SABMiller has rejected AB InBev's latest takeover offer of £42.15 per share.

The company confirmed in a statement on Wednesday afternoon that the board, not including Altria Group's appointed directors, unanimously rejected the proposal.

"It still very substantially undervalues SABMiller, its unique and unmatched footprint, and its standalone prospects."

Before the offer was officially rejected, Altria Group publicly encouraged the board to engage with AB InBev and noted it supports a bid at £42.15 or higher.

It's AB InBev's third takeover offer, after the brewing giant previously offered £38 per share and £40 per share.

The company said on Wednesday morning that it was "disappointed that the board of SABMiller has rejected both of these prior approaches without any meaningful engagement."

But SABMiller chairman Jan du Plessis earlier said it is the “crown jewel” of the global brewing industry.

“[The company is] uniquely positioned to continue to generate decades of standalone future volume and value growth for all SABMiller shareholders from highly attractive markets.

“AB InBev needs SABMiller but has made opportunistic and highly conditional proposals, elements of which have been deliberately designed to be unattractive to many of our shareholders.”

Societe Generale believes the offer will be increased to £43 per share based on the last few offers.

“However, if this bid falls away there will likely be severe repercussions in the SABMiller boardroom – a risk that management would likely not want to take – so we don’t think a large increase will be necessary.”

AB InBev said the proposal announced early Wednesday morning was designed to be a compelling cash offer for SABMiller’s public shareholders and Altria Group and BevCo, who together hold a stake of around 41%.

It said the proposal represented a premium of approximately 44% to SABMiller’s closing share price of £29.34 on 14 September, the day prior to speculation about a possible takeover.

The new deal also included a partial share alternative available for around 41% of the SABMiller shares, which would be subject to a five-year lock-up from closing and able to be converted into AB InBev ordinary shares after that time.

SABMiller's shares were down 38p at 1331 BST to 3,660.00p.