Higher InBev bid set to win over Busch

Click to follow
The Independent Online

The Busch family has dropped hostilities to InBev and could agree to sell Anheuser Busch as early as this weekend, after its rival reportedly upped its bid to $50bn.

After a week of recriminations, InBev moved a step closer to securing the takeover of the Budweiser brewer Anheuser as the two sides agreed to hold friendly talks. The move came after the Belgian group offered to raise its indicative bid by $5 a share to $70.

Despite InBev's attempts to oust its target's board – which was swiftly countered with a lawsuit – it now hopes the discussions will be resolved with an agreed deal by Sunday night.

Anheuser and InBev declined to comment last night.

The move comes after relations between the two companies reached breaking point. After a month of unsuccessfully attempting to engage with the Anheuser board following the initial indicative approach, InBev made its first hostile move on Monday.

The group, which owns brands including Stella Artois, set in motion a plan to oust the entire Anheuser board and replace it with an independent board. The move bypassed Anheuser, and was its first direct plea to shareholders. Some, including the billionaire investor Warren Buffett, have pushed for a deal to be done.

Anheuser shot back the following day, launching a lawsuit to derail InBev's move, criticising the methods and proposals surrounding its bid, claiming it was "illegal".

The document filed in Anheuser's local court in Missouri, rather than the usual Delaware courts for company cases, accused InBev of making "false and misleading statements".

It threw doubt on whether InBev would be able to operate the North American business of a merged company from the US, because of its operations in Cuba. It raised another serious question over its rival's ability to put together its proposed debt package of $40bn, arranged by eight investment banks. Anheuser said that give the parlous state of the debt markets, no group of lenders would unconditionally provide that amount of debt.

InBev hit back saying it had paid $50m to secure the commitment of the banks, which include JP Morgan and Deutsche Bank. The loan was formally launched on Thursday.

Sources close to InBev said Anheuser's riposte had been thoroughly expected.

Both sides have brought in a phalanx of advisers, as is normal on a multibillion-dollar deal. Deutsche Bank, BNP Paribas, Lazard and JP Morgan are advising InBev, while Goldman Sachs, Merrill Lynch and Citigroup have been brought in by Anheuser, according to the data provider dealReporter.

Even if a deal is agreed this weekend, it is unlikely to be the end of the saga as people in Anheuser's home town of St Louis have reacted angrily to news that the group could be sold, with protests and internet petitions.