SABMiller set to receive formal offer from AB InBev sooner than expected

LONDON (ShareCast) - (ShareCast News) - An offer for SABMiller (Xetra: BRW1.DE - news) could be tabled by AB InBev much sooner than originally anticipated, with a first bid possibly submitted as early as Monday. Talks between the two brewing giants are said to have been warming up and carried on into the weekend.

While SABMiller is taking a tough stance on price, it is no longer believed to be opposed to a deal, the Sunday Times reported.

A takeover is thought to be seen as a good option by many of the company's biggest shareholders, which has led to a change from what was reported to be SABMiller's original defensive position.

AB InBev has until 14th October to put in a formal bid.

The recent sell-off in non-extractive equities with strong underlying operations may be the main factor behind the timing of AB Inbev's move for SAB Miller, said Jonathan Buxton, Head (Other OTC: HEDYY - news) of Consumer at Cavendish Corporate Finance.

"The argument for a brewing merger with complementary emerging markets operations looks compelling and that rationale will apply to other global producers and manufacturers if equities continue to drift and investors can be swayed by a price that will provide a far higher premium than would have been possible this spring.

"Big companies have been hoarding cash for years since the financial crisis and now may be a time for a wave of corporate on corporate deals, with private equity pushed aside by company executives looking to grow through cash and share mergers with peers rather than buy-outs,'" Buxton added.