InBev bid gets hostile but Anheuser fights back

Posted by Daniel Palmer on 10th July 2008

What was originally meant to be an amicable deal between the second and third largest brewers in the world has quickly degenerated into a hostile bid with lawsuits being filed by both parties.

InBev, the Belgian giant, last month made an friendly but unsolicited bid of $US46b for Anheuser-Busch, which was dismissed by the Anheuser Board due to concerns it did not provide fair value for the US-based company. Since the Board made their opinion public InBev has filed a preliminary consent solicitation statement seeking to remove each member of the board of directors of Anheuser-Busch Companies Inc. and provide Anheuser-Busch shareholders an opportunity to have a direct voice in the proposed combination with InBev.

InBev were not alone in their desire to give Anheuser shareholders an opinion on the potential takeover with up to a dozen lawsuits filed in St. Louis by Anheuser shareholders which related to the potential takeover and issues about the Anheuser Board not giving the proposal due consideration.

Anheuser-Busch, however, has now filed a lawsuit against InBev in a bid to prevent the company from calling on shareholders to sack the board amid claims that InBev’s plans are “illegal” and “deceptive”. They have also urged their shareholders to withhold consent from InBev and to have faith in the companies plans to streamline operations and cut costs.

“InBev’s announced attempt to seek to replace Anheuser-Busch’s existing board of directors with InBev’s hand-picked nominees 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,” Anheuser claimed in a statement released on Monday. Anheuser has suggested they would be prepared to consider an improved offer but InBev maintain that the offer is fair value and are still seeking an amicable deal.

“Our strong preference remains to enter into a constructive dialogue with Anheuser-Busch to achieve a friendly combination that comprehensively addresses the interests of all constituents,” Carlos Brito, CEO of InBev, said.

With InBev’s obviously strong desire to takeover Anheuser an acquisition still appears to be on the cards but reports suggest they might need to up the offer in order to complete the deal. At the moment, though, a friendly combination appears a forlorn hope.