Megabrew deal: SABMiller board meets to discuss shareholder concerns over AB InBev takeover ahead of AGM

Francesca Washtell
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SABMiller's board will be hoping things don't get messy with its investors (Source: Getty)

The SABMiller board of directors will today discuss frustration among some of its FTSE 100 shareholders over the proposed terms of the AB InBev "megabrew" takeover deal.

Disgruntled activist investors, which include the hedge fund Elliott, are unhappy with the proposed £44 per share deal that was announced last November.

They believe the other stock and cash option, technically available to all shareholders, favours the two major investors of Colombia's Santo Domingo family and cigarette maker Altria.

Although there is another option, which involves a mix of mostly unlisted AB InBev shares (at around £39 a pop) and a small cash payout, the stock on offer cannot be sold for five years and means most institutional investors must opt for the all-cash option instead.

Read more: AB InBev offers to sell more SABMiller brands to secure Megabrew deal

In addition, since the UK's vote for Brexit in last month's referendum, the stock-and-cash deal is now far more lucrative, worth around £50-a-share, which has riled many of SABMiller's other investors.

However, at present the £44 per share cash deal is still only a proposal and could theoretically be changed at a future date.

AB InBev, the world's largest brewer, gained approval on preconditions for the merger from the European Union in May and South Africa in June, but still requires a green light from the US and China.

The US is reportedly set to approve the deal, as is China's antitrust authority.

Before it is waved through in all four markets, AB InBev will not submit a formal proposal, meaning the SABMiller board will not be able to make a formal recommendation on the offer.

The board will be meeting ahead of the British drinks giant's AGM tomorrow. SABMiller declined to comment.

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