SABMiller rejects ‘informal’ offer from AB InBev as too low
The proposal made last week was worth slightly over £40 per share
SABMiller’s Miller and Grolsch. Photograph: David Jones/PA Wire
The proposal made last week was worth slightly over £40 per share, according to Bloomberg, which cited sources familiar with the matter.
SABMiller executives and some shareholders regarded a price closer to £45 as representing fair value, it added.
A source familiar with the matter said that discussions were ongoing and there was talk of both sides possibly asking for an extension of the October 14th deadline for a formal bid, given the complexity of such a deal.
At £40 per share, a takeover of the world’s No 2 brewer would cost nearly £65 billion. At £45, it would be close to £73 billion.
A source familiar with AB InBev’s thinking said it “would not overpay”.
SAB reported earlier on Tuesday that group revenue, excluding currency effects, rose 6 per cent in its second quarter, to September 30th, while volumes rose 2 per cent. That marked an improvement from the first quarter, when revenue rose 3 per cent and volume was flat.
The performance update had been scheduled for October 15th, the day after the deadline for AB InBev to make a firm offer.
SAB said it had brought forward its update to ensure the timely release of information during what is classed as an offer period.
Yet the positive picture was clouded by the weakness of a range of currencies against the US dollar, such as the South African rand. Reported group revenue, taking into account currency effects, fell 9 per cent in both the first half and second quarter.
Growth was driven by demand in its Latin American and African markets, which are seen as being among the most attractive to AB InBev.