NEW YORK -- Anheuser-Busch Cos. on Friday detailed its plan to make the company more valuable than the $65 per share offer it rejected from InBev, and gave 2008 and 2009 profit guidance above analyst expectations, said the Associated Press. In a conference call with investors, A-B executives reiterated that InBev's proposal, which it rejected on Thursday, undervalued the St. Louis, Mo.-based company and its future growth prospects.
The call came a day after InBev filed a suit in Delaware court, where A-B is incorporated, seeking to officially declare that shareholders can remove all 13 [image-nocss] members of A-B's board. Such a declaration could be the first step to rally A-B shareholders to accept InBev's offer, even if management is opposed to it.
As part of the plan, A-B said it expects low-double digit earnings per share growth in fiscal 2008, with a target of $3.13 per share. Analysts polled by Thomson Financial, on average, predict a profit of $3.01 per share. For fiscal 2009, the company expects earnings of $3.90 per share, while analysts predict $3.29 per share. A-B now plans to save $1 billion total between 2008 and 2010, up from $500 million it said it expected to save in February. It expects 75% of the savings in 2008 and 2009.
A-B said it will drive results partly with price increases, spurred by commodity cost pressures including higher fuel prices and raw material costs. Increases will be heavily weighted in the fourth quarter, with 95% in September in October, and occur over 85% of volume.
The company expects revenue per barrel to increase 4% both in 2008 and 2009, driven by the price increases.
Also, the company is implementing an early retirement plan it will offer to salaried employees in the third quarter. Of the 8,600 employees eligible for the program, including 1,300 who are 55 and older, the company expects 10% to 15% will accept the plan. A-B will take a $300 million to $400 million charge related to the retirement plan in the fourth quarter.
The beermaker also said it is increasing its 2008 share repurchase plan to $3 billion from $2 billion and plans for $4 billion in repurchases in 2009.
The company said that while growing U.S. market share continues to be objective, its savings plan assumes zero market-share growth.
The company does not plan to sell its entertainment and parks divisions as part of the plan, the company said.
W. Randolph Baker, vice president and CFO, said InBev's offer undervalues the company, given its future growth plan, the "value of our iconic brand and substantial market share leadership in the most profitable beer market," the United States.
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