InBev And Anheuser May Toast After All
Javier Espinoza and Miriam Marcus 07.11.08, 6:20 PM ET
LONDON -
Patriotic though it may seem, Anheuser-Busch could be cozying up to a new drinking partner in InBev. The Belgian brewer has reportedly hiked its takeover bid for the brewer of Budweiser beer by $5 a share, to $70, valuing its target at $50.8 billion, and Anheuser has also reportedly agreed to engage in friendly talks. In June, InBev launched an unsolicited $46.3 billion takeover offer, sparking animosity between the two companies.
Analysts have told Forbes.com over the past few weeks however that InBev was likely to increase the price per share of its offer, as Anheuser shareholders were trying to squeeze out a better deal.
Investors seem to think a higher bid is coming. Anheuser-Busch jumped 8.6%, or $5.29, to close at $66.50, in trading in New York, above the previous bid price. Shares in InBev rose 7.4%, or 3.05 euros ($4.85), to 44.55 euros ($70.82), in Brussels.
InBev refused to comment, and Anheuser-Busch "does not confirm, deny or speculate on rumors of potential investments, acquisitions, mergers, new business partnerships or other transactions," said W. Randolph Baker, the company's vice president and chief financial officer.
"It appears that, based on the price increase, Anheuser is willing to engage in a transaction with InBev," Morton Pierce, chief executive of Mergers & Acquisitions group, told Forbes.com.
"The price increase was intended to put pressure on Anheuser-Busch to negotiate and also generate more shareholder pressure," Pierce said.
Should the deal take place, it will rank as the largest takeover in the United States for 2008, according to Thompson Financial.
A report on the Wall Street Journal's Web site on Friday said that InBev had raised its bid for Anheuser, and cited a person familiar with the matter. It said the Anheuser-Busch board is likely to accept the offer this weekend.
That would be a stunning turnaround from the often heated rhetoric between the two companies over the past several days.
Analyst Juli Niemann of Smith Moore investment brokers agreed the merger could be announced any day. "It really is all about the money," Niemann said. "We just had to get a little bit more on the table. Bottom line is the rest is just housekeeping--what's going to be the name of the new company, that sort of thing. The layoffs will go ahead. Asset sales--you've got to pay for it."
InBev is also said to have launched a $45.0 billion syndicated loan to purchase Anheuser, according to TradeTheNews., and is asking its relationship banks for large commitments of $1.75 billion each, in return for high pricing and fees and a rapid refinancing strategy, all of which have been designed to counter tough and illiquid loan market conditions, Reuters reported.
Since InBev made its original $46.3 billion, $65-a-share bid for Anheuser in June, the two sides have not been speaking to each other, at least publicly.
Both companies have approached the courts, with the Belgian brewer looking to oust Anheuser's board and replace it with its own version that includes a member of the Busch family, while the St. Louis-based Anheuser has responded by filing suit in a U.S. federal court on Tuesday, and has also criticized InBev for having operations in Cuba.
The Associated Press and Reuters contributed to this article.
