E-Malt.com News article: USA & Belgium: Anheuser-Busch board to meet face-to-face for the first time since rival brewer InBev formally made its bid to buy the company

Anheuser-Busch Cos's board plans to meet face-to-face tomorrow for the first time since rival brewer InBev formally made its $46bn bid to buy the company, The Financial Times posted on June 19, citing people close to the situation.

The directors will weigh a variety of options for Anheuser, the 150-year-old brewer of Budweiser beer. But in a sign that Anheuser may not unequivocally reject InBev's advances, insiders say its advisers will focus the board's attention on the valuation of InBev's bid. At $65 per Anheuser share, they may argue that the bid is too low for a brand that InBev has called "iconic".

The offer, which equates to roughly 12 times Anheuser's 2007 earnings before interest, taxes, depreciation and amortisation, represents a 35 per cent premium to Anheuser's average share price over the month before the bid announcement. Carlos Brito, InBev's chief executive, said yesterday that it had offered a "full price".

Sales of other well-known brands including Wrigley and Gillette have earned richer valuations, however, and Anheuser may point to those examples in its response to InBev.

Anheuser's shares closed yesterday at $61.90, as investors attempted to handicap the likelihood of a deal. The bid by the Belgian brewer for Anheuser has all the makings of an epic saga - wads of money at risk, dynastic families and a multinational cast of executives, all mixed together with a dose of politics and a splash of beer.

So far, both sides have adhered closely to the mergers and acquisitions playbook. InBev leapt out of the gate with a strong price that has some Anheuser shareholders salivating and invited its target into friendly talks.

Anheuser signalled that it might take a while to respond and then set out to find credible alternatives and comparable transactions it might use either to structure a defence or argue for more money.

Whether the process moves predictably forward or veers on to a more complicated trajectory will depend on Anheuser's board, which includes members of its founding Busch family and its hometown community of St Louis, Missouri, as well as independent directors.

Under such a spotlight, sources say the board may feel it needs independent counsel to navigate the process and perform its fiduciary duty to shareholders.


19 June, 2008