An upswing in the share price of the world's largest brewer, Anheuser-Busch InBev, could force a change in the terms of its "megabrew" takeover of British drinks giant SABMiller.
Since the megabrew deal was agreed last October for £71bn, shares in AB InBev have risen more than 12 per cent and reduced the appeal of the original all-cash option offered to all but two of the company's investors, according to a report in the Sunday Times.
SABMiller's two largest shareholders, Colombia's Santo Domingo family and the tobacco giant Altria, agreed to take a mixture of cash and shares, while other investors were expected to choose a cash-only deal worth £44 per share, or around £5 a share more at the time.
AB InBev's share price gains are now making some large hedge funds consider taking cash and shares, even though it would lock them into holding the brewer's stock for five years, which City sources told the Sunday Times could give them an even bigger return on their investment.
However, if investors pushed for a wider adoption of mixed cash and shares deals, it would force AB InBev to restructure the newly-formed company, as it has only released enough shares to cover demand from the Santo Domingo family and Altria.
Attempts to woo regulators
Last week, AB InBev's stock rose 5.1 per cent to finish at €112.10 (£89), following the announcement of a "groundbreaking" deal with the South African government on Thursday.
In an attempt to woo South African regulators and push through the SABMiller takeover, the brewer agreed to ensure jobs for five years and pay R1bn (£48m) in a package of commitments that included support to small-holder farmers, local enterprise development and manufacturing, as well as investments in green and water-saving technologies.
Earlier last week, in a bid to assuage concerns of European antitrust regulators AB InBev announced it plans to sell the premium Peroni, Grolsch and Meantime brands owned by SABMiller.
In another previous attempt to pace the way for the megabrew deal, AB InBev embarked on a jumbo euro bond deal in mid-March, offering a six-tranche, euro-dominated deal with maturities ranging from four to 20 years in length at a minimum of $1bn each in size.
AB InBev was not available to comment.