Waiting for A-B

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Brew blog

Board has not yet taken a public position on InBev bid.

“How long can A-B wait?” asks a headline in today’s St. Louis Post-Dispatch.

It’s referring, of course, to the fact that it’s been 13 days since InBev made an unsolicited, $65-per-share bid for Anheuser-Busch. And the A-B board has yet to make a public response.

The answer to the question: It’s hard to say. While the company is not legally bound to respond in a certain time frame, shareholders might get antsy if things drag on for too long.

From the story:

Experts say the 13-member board is not legally required to respond within a certain time frame, because InBev approached Anheuser-Busch with a nonbinding letter of interest.

“Nothing’s been formally presented to them that puts their backs up against the wall,” said David Stone, a mergers and acquisitions expert with the Neal, Gerber & Eisenberg law firm.

But in practical terms, Anheuser-Busch’s board is still limited by what one commentator called “the elephant in the room” — the possibility that InBev could turn hostile, going over the board’s head and soliciting shareholders directly. If InBev made a public offer to buy shares directly from shareholders, the directors would have 10 business days to recommend, disapprove or take no position on the deal, Stone said.

The longer Anheuser-Busch waits, the more likely a hostile route becomes, said B. Craig Hutson, senior bond analyst at Gimme Credit.

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