AB InBev is not giving up on its desire to "build the first truly global beer company" by increasing its offer for rival SABMiller to £42.15 per share. SABMiller's share price rose three per cent on the news.
Previous bid offers from the Belgian company were previously rejected by SABMiller, including yesterday's £40 per share offer and a suggestion by AB InBev's chief executive Carlos Brito on Monday that the deal could rise to £42 per share.
Jan du Plessis, chairman of SABMiller, said:
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.
SABMiller said in a statement today that the full board met on 5 October and "reconfirmed its rejection of the £40 per share proposal". The statement continued:
The board, excluding the directors nominated by Altria, also concluded that, even if AB InBev formalised the £42 proposal, it would reject such a proposal as it still very substantially undervalues SABMiller.
Yesterday shares in SABMiller dropped following a report that it had turned down an offer from AB InBev.
AB InBev said it was "disappointed that the board of SABMiller has rejected both of these prior approaches without any meaningful engagement", in a statement released this morning.
The brewer continued:
"Given the largely complementary geographical footprints and brand portfolios of AB InBev and SABMiller, the combined group would have operations in virtually every major beer market, including key emerging regions with strong growth prospects such as Africa, Asia, and Central and South America."
Altria, SABMiller's largest shareholder, said it "supports a proposal of £42.15, or higher, with a partial share alternative, and, subject to finalization of terms, would be prepared to elect the partial share alternative. Altria urges SABMiller’s board to engage promptly and constructively with AB InBev to agree on the terms of a recommended offer".
AB InBev is going all to court its British rival, dedicating its home page to declaring the merits of what the companies could do together: "Put simply, we believe we can achieve more together than each of us could separately," Brito said in a video.
The British firm first confirmed that it had been approached by its rival in September. AB InBev, the world's largest brewer, which is partly owned by Brazilian investment fund 3G, still has until 14 October to make an official offer.
The deal between the world's two largest brewers would create a company worth around £177bn.
This week SABMiller reported a nine per cent fall in reported revenues in the three months to the end of September, placing the blame on currency charges. Sales volumes rose two per cent in the period.