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SABMiller Signals No Deal With Budweiser

(c) Sky News 2015

SABMiller (Xetra: BRW1.DE - news) has described the latest bid for the company by the world's largest brewer as "opportunistic, highly conditional" and "substantially undervaluing" its business.

The FTSE 100 firm spoke out hours after Anheuser-Busch InBev, which makes Budweiser, Stella Artois and Corona, confirmed it had made a third bid, representing an all-cash offer of 42.15p-per-share.

The board later voted to reject that offer which valued SAB at £68.1bn on the face of the all-cash element but SAB argued that, under the terms offered by Ab InBev, some shareholders would achieve £2 less per share for their stock.

AB InBev said it believed the offer would be attractive to SAB investors as it wanted to "build the first truly global beer company."

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It (Other OTC: ITGL - news) called for "meaningful engagement" with SAB but the board rejected the latest bid despite directors nominated by its largest shareholder, Altria Group (NYSE: MO - news) , voting in favour of a deal.

Altria had said in a statement: "Altria urges SABMiller's board to engage promptly and constructively with AB InBev to agree on the terms of a recommended offer.

But SAB's own release pushed its case to remain a standalone firm.

It said: "It should be noted that the all-cash offer within the new proposal announced today is only 15p (per share) higher than the £42 (per share) proposal considered and rejected on 5 October 2015.

SAB's chairman, Jan du Plessis, added: "SABMiller is the crown jewel of the global brewing industry, uniquely positioned to continue to generate decades of standalone future volume and value growth for all SABMiller shareholders from highly attractive markets.

"AB InBev needs SABMiller but has made opportunistic and highly conditional proposals, elements of which have been deliberately designed to be unattractive to many of our shareholders.

"AB InBev is very substantially undervaluing SABMiller."

SAB's shares were 3% higher in the first hour of trading on Wednesday before dropping back when it was confirmed the third bid had been turned down.