Who’s ready to pay for another round in the AB InBev-SABMiller lock-in?

Outlook

Heineken, Anheuser-Busch InBev and Carlsberg are all investing in cider (Getty Images)

Anheuser-Busch InBev has sprinkled a little sugar on its proposal to take over rival brewer SABMiller. Having been sent packing at £40 a share, the two sides met a couple of days ago when the figure of £42 was mooted as a maybe. Now it’s been formalised (sort of) as a “proposal” at £42.15 a share, but of far more significance is the fact there is now a paper-based component.

If you’re desperate to accept, and want a piece of the merged company when the deal is done, you can opt for part-payment in restricted shares which can’t be sold for five years. You’ll get less than you would by accepting cash. A price, in fact, not much better than SAB’s pre-takeover-talk high for the year of £37.68. But if you buy into AB InBev’s arguments and would face a big US tax bill through taking cash, then maybe this looks OK.

Hence the decision by US tobacco company Altria, which got its shares when InBev took over Budweiser-maker Anheuser-Busch, to back a £65bn proposal which has been deliberately structured to get around its issues with Uncle Sam.

InBev thought it had the other big noise on side – BevCo, the holding company for Colombia’s Santo Domingo family. But it didn’t and was forced to issue a clarification by the Takeover Panel. Oops.

As ever with these phantom bids, everything ultimately rests on SAB’s board recommending a deal. AB InBev urged shareholders to deploy their thumbscrews. In other words, it wants them to do its work for it. But the fact that it has structured a proposal tweaked in the interests of just one of them is something they should remember.

AB InBev could argue that the share alternative is available to anyone who wants to avail themselves of it. But the conditions mean those shares will be all but useless to most institutions.

This is still a deal that may ultimately get done, even though it probably shouldn’t. The offer isn’t all that compelling when you look at the potential of SAB’s African operations; the reason it is not being laughed out of court is largely because Westerners underestimate the potential of what may become the world’s next great economic growth story.

So SAB’s board should stick to its guns.

The Takeover Panel has given AB InBev one more week to put up or shut up. This dog and pony show demonstrates the value of it having the power to do so.