ST. LOUIS -- InBev was expected yesterday to file a preliminary consent solicitation statement with the U.S. Securities & Exchange Commission (SEC) seeking to remove each member of the board of directors of Anheuser-Busch Cos. and provide A-B shareholders an opportunity to have a direct voice in the proposed combination with Belgium-based InBev.
At the same time, A-B said InBev's attempt to replace the existing board of directors with hand-picked nominees is a self-serving effort by InBev to try to purchase A-B for a price A-B's independent board already has determined to be financially [image-nocss] inadequate and not in the best interest of shareholders.
On June 11, 2008, InBev announced a proposal for a combination to create the world's leading beer company through an acquisition of all the outstanding common shares of A-B at $65 per share in cash, representing an immediate premium of 35% over the unaffected share price and a premium of 18% over the previous all-time high in October 2002.
That offer having been rejected by A-B's Board of Directors, InBev is proposing a slate of new directors that it feels will act in the best interest of A-B shareholders.
"Our strong preference remains to enter into a constructive dialogue with [A-B] to achieve a friendly combination that comprehensively addresses the interests of all constituents," said InBev CEO Carlos Brito in a statement. "We believe our firm offer of $65 per share reflects the full and fair value of [A-B] and is a compelling proposal for shareholders. The proposal is backed by fully committed financing and provides immediate certainty of value in a weakened stock market environment."
Since rejecting InBev's offer, A-B has outlined a plan to improve the financial results of the company, a plan Brito said "entails significant execution risks and does little to address the fundamental competitive challenges the company faces in an increasingly global industry, wherein a competitive brand portfolio, a worldwide distribution network and economies of scale are key drivers of success.
"Our proposal seeks to deliver immediate value to [A-B] shareholders," Brito added, "while building a stronger, more competitive company to the benefit of all constituents, including consumers, employees, wholesalers, business partners and the communities we serve."
To date, St. Louis-based A-B has been unwilling to engage with InBev in a dialogue to achieve a friendly combination. As such, InBev said it believes it is time to take action to ensure A-B shareholders are provided the opportunity to have a direct voice in the process and a say in the future direction of the company.
When it rejected the original InBev offer, the A-B board told InBev it would be open to consider any proposal that would provide full and certain value to A-B shareholders. InBev has made no attempt to provide such an offer, according to A-B, nor has it provided details of its self-proclaimed financing, including the conditions to that financing.
Further, InBev's non-binding proposal is not a firm offer and could even be lowered, A-B stated. Its proposal is merely an invitation to negotiate. A-B believes its present board of directors is in a better position to create the best value for its shareholders than a slate proposed by InBev and the election of which is being paid for by InBev.
InBev's proposed slate is composed of experienced, distinguished business executives, including a number of former chief executive officers of leading U.S. public companies across various sectors. It includes:
Marjorie L. Bowen, a former managing director of Houlihan Lokey Howard & Zukin, an international investment bank, where she also served as a national director of the firm's fairness opinion practice. Adolphus A. Busch IV, the founder and chairman of the Great Rivers Habitat Alliance, a conservation organization founded in 2000. Busch is the great-grandson and namesake of the founder of Anheuser-Busch. He is the uncle of August A. Busch IV (the current president and CEO of A-B) and the half-brother of August Busch III (the former chairman, president and CEO and current director of A-B). G. Peter D'Aloia, the former senior vice president and chief financial officer of Trane Inc., formerly known as American Standard Cos. Inc. Ronald W. Dollens, the former president and CEO of Guidant Corp., which merged with the Boston Scientific Corp. in 2006. James E. Healey, the former senior vice president and CFO of Nabisco Group Holdings. John N. Lilly, the former CEO of The Pillsbury Co. Allan Z. Loren, the former chairman and CEO of Dun & Bradstreet Inc. Ernest Mario, the former CEO of Glaxo Holdings plc. Henry A. McKinnell, the former chairman and CEO of Pfizer Inc. Paul M. Meister, the CEO and co-founder of Liberty Lane Partners LLC, a private investment firm and former executive vice president, vice chairman and CFO of Fisher Scientific International Inc. William T. Vinson, the former vice president and chief counsel of the Lockheed Martin Corp. Lawrence Keith Wimbush, adjunct professor of law at Thomas Cooley Law School, former senior client partner and co-practice leader in the legal specialist group of Korn/Ferry International. Larry D. Yost, former chairman and CEO of ArvinMeritor Inc.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.