Fighting talk as AB InBev makes third offer to SABMiller

The company confirmed the move in a statement on Wednesday and also revealed its previous offers for the brewing giant of £38 per share and £40 per share.

“AB InBev is disappointed that the board of SABMiller has rejected both of these prior approaches without any meaningful engagement,” it said.

But SABMiller issued a statement on Wednesday to explain why the initial two offers were rejected.

It said the proposals “very substantially undervalue SABMiller and its standalone prospects and growth potential” and that the approach had been timed “opportunistically to take advantage of SABMiller's recently depressed share price”.

It also said that on Monday, AB InBev retabled its £40 per share offer, but indicated it could increase the offer to £42 per share if the SABMiller board recommended it.

The board said even if the £42 offer was formalised, it would still be rejected as it would substantially undervalue the company.

SABMiller chairman Jan du Plessis said SABMiller 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 said it expected the latest offer to be rejected and believes the offer will be increased to £43 per share based on the last few offers.

“We don’t think it would be able to accept [the £42.15 offer] without losing face,” the note said.

“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 revised proposal is 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 represents 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.

At 1157 BST, SABMiller shares were up 1.17% at 3,664.50p.