ST. LOUIS -- Anheuser-Busch Cos. Inc. said that its board has unanimously determined that the unsolicited, non-binding proposal by InBev to acquire all outstanding shares of Anheuser-Busch for $65 per share is financially inadequate and not in the best interests of Anheuser Busch shareholders. InBev has responded with a lawsuit designed to remove A-B's board.
"InBev 's proposal significantly undervalues the unique assets and prospects of [A-B]," said Patrick Stokes, chairman, in a statement. "The proposed price does not reflect the strength of [A-B's] global, iconic brands Bud Light and [image-nocss] Budweiser, the top-two selling beer brands in the world, with Budweiser selling in more than 80 countries today. The proposal also undervalues the earnings growth actions that the company had already planned, which have significant potential for shareholder value creation; the company 's market position in the United States, the most-profitable beer market in the world; and the high value of its existing strategic investments."
The board thoroughly studied the proposal with independent financial and legal advisers on multiple occasions during the two-week period since the proposal was made, the company said, and the board 's independent directors also met alone to fully examine its merits.
"The InBev proposal fails to be competitive with alternative plans the company has developed in recent months to generate significant top-line and bottom-line growth, which will increase value for the company's shareholders," said Douglas A. Warner III, the board's lead independent director. "The board will continue to consider all opportunities that build shareholder value."
The board communicated its decision in a letter sent from August A. Busch IV, St. Louis-based A-B's president and CEO, to Carlos Brito, CEO of InBev. (Click here to view the full text of the letter.)
Belgian brewer InBev released a statement that said "it remains committed to its proposed combination with [A-B] and its offer of $65 per-share in cash for all of the outstanding common shares of the company, representing an immediate premium of 35% over the unaffected price of the shares."
The statement added, "InBev 's strong preference is to enter into a constructive dialogue with Anheuser-Busch to achieve a friendly combination that comprehensively addresses the interests of all constituents. At the same time, the company is also seeking a declaratory ruling in Delaware regarding alternative routes to progress the combination to ensure that [A-B] shareholders preserve their voice in the process."
To that end, the company said that it has "filed suit in Delaware Chancery Court seeking a judgment to confirm that shareholders acting by written consent may under Delaware law remove without cause all 13 of the present [A-B] directors, including the five elected in 2006. Under the charter of [A-B] and as a matter of Delaware law, it is clear that the eight directors elected after 2006 are subject to removal without cause through the written consent procedure; the filing seeks to confirm that, as InBev strongly believes, the directors elected in 2006 are also now subject to removal through that same mechanism."
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