InBev-Bud Odds “Slightly Greater than 50-50” — Says a Busch


Brew blog

Board meets today, says family member.

InBev’s proposed, unsolicited $46.3 billion bid for Anheuser-Busch has a better than 50 percent chance of succeeding, a Busch family member told the St. Louis Post-Dispatch.

The paper spoke with Adolphus Busch IV — the uncle of A-B CEO August Busch IV — late Thursday. From the story:

Busch said nonemployee family members took part in a conference call Wednesday with Bank of America advisers but didn’t reach a consensus on the $65-a-share cash offer.

“There was just a whole range of questions involving the merger and the consequences to St. Louis,” he said.

Busch added, “I think probably there could be a slightly greater than 50-50 chance” of the deal going through.

Busch also told the Post-Dispatch that the board will meet today to discuss the bid, most likely at the brewery. A-B has declined to comment on whether the board is meeting this week.

Observers expect the board will seek to buy time rather than accept or outright reject the bid, according to a Reuters report. From the story:

Instead the St. Louis-based brewer is likely to suggest that the bid, which sparked an outcry from some U.S. politicians and led InBev to hire Washington lobbyists, undervalues the company, analysts have said.

“I suspect that they (the board) will say that the offer is too low and that they are looking at options to create better value to get to a higher number,” said Harry Schuhmacher, publisher of Beer Business Daily. “They won’t reject the offer … but they’ll signal that it’s too low.”

An analyst quoted by Post-Dispatch, meanwhile, said the offer was “pretty generous.”

David Kolpak, a food and beverage analyst for Victory Capital Management in Cleveland, said it would be difficult for shareholders to reject InBev’s offer.

“I think the deal on a purely financial basis is a pretty generous one for Anheuser shareholders,” Kolpak said. “It will be tough for Anheuser management to make a compelling case to reject it. I think you have to look at the record of the last few years of the company, and it’s hard to make an argument where the shares would be worth $65 or $60 or even $55.”



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