InBev Gets Tough With Anheuser-Busch

InBev, the Belgian brewer, in talks to buy American brewer Anheuser-Busch, has indicated to the Securities and Exchange Commission that it will replace all of the current serving board members of A-B. The proposed board includes Adolphus Busch IV, who has encouraged A-B to negotiate with InBev.

InBev has offered 35% over the current share price for A-B and 18% over the previous all-time high. Yet, A-B rejected the proposal last month.

Really?

Don’t misconstrue my disbelief. Like Chris, I won’t lose any sleep over the purchase – after all, I’m more likely to pick up an InBev brewed Stella Artois or Beck’s than a Bud. But I’m not gung ho to see another American company sold either.

That said, I can’t imagine how turning down the purchase is good for shareholders. A-B is not in a favorable economic position right. To keep the company, A-B has been forced into an extensive reorganization to increase profits and cut costs, measures that InBev has criticized.

A-B responded to the filing by saying the move “is a self-serving effort by InBev to try to purchase Anheuser-Busch for a price Anheuser-Busch’s independent board already has determined to be financially inadequate and not in the best interest of shareholders.”

Financially inadequate, really? Almost 20% over the high price to date?

Call a spade a spade: it’s clear that A-B doesn’t want to sell. InBev has claimed that the company is unwilling to even enter into discussions on a takeover.

That behavior seems to be what’s not in the best interest of shareholders. The speculation hasn’t helped for sure: shares of A-B closed Monday at $61.74 – still less than the $65 offer made by InBev previously.