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SABMiller shareholder vote on £79bn AB InBev deal will be split in two

August 24, 2016
Consumer Packaged Goods

The shareholder vote on SABMiller’s £79bn takeover by Stella Artois-owner Anheuser-Busch InBev has been split in two in a move that makes it easier for investors to block Britain’s biggest ever deal.

Tobacco company Altria and Colombia’s Santo Domingo family, which together own about 40pc of SAB, will be treated as a separate class of shareholder to the rest of the beer giant’s investors when it comes to voting on the deal on September 28, the High Court has ruled. The decision comes after some SAB shareholders mounted a revolt against AB InBev’s offer and successfully forced the Stella Artois owner to raise its bid last month.

Creating two classes of SAB shareholders in theory means it would only take about 15pc of the FTSE 100 brewer’s investors to reject the contentious deal for it to be blocked, assuming a full turnout for the vote, according to analysts.

Altria and the Santo Domingos, SAB’s two biggest investors, have already pledged to accept AB InBev’s offer. SAB now needs the support of 75pc of the remaining 60pc of its shareholders for the deal to proceed. At least two SAB investors – Aberdeen Asset Management and Vontobel – are known to be dissatisfied with the takeover.

SAB itself had in July recommended that two classes of shareholders be created, in an attempt to mollify unhappy investors. While analysts are confident that enough SAB shareholders will back the deal, the ruling nevertheless ratchets up the pressure on the both brewers as the vote approaches.

The pound’s plunge in the wake of the Brexit vote in June sparked an investor rebellion because under the terms of AB InBev’s two-part offer, Altria and the Santo Domingo’s currently stand to get a better deal.

The pair are accepting a mixture of unlisted AB InBev stock and cash from the Stella Artois owner while other investors are expected to take an all-cash offer. AB InBev designed the share-and-cash portion of the deal specifically for Altria and the Santo Domingos, to soften the tax hit they would suffer from the takeover.

Because AB InBev’s shares are euro-denominated, the paper-and-cash mix is currently worth more than the all-cash offer, even after AB InBev hiked the latter to £45-a-share from £44 to the quell the revolt.

The sweetened offer from the Stella Artois giant failed to please Aberdeen, which said last month: “We intend to vote against the deal as we are uncomfortable with the structure and believe it undervalues the company.

“We would welcome other investors who value good corporate governance and recognise the superior value from continuing to hold SABMiller as a standalone entity voting in a similar fashion.”

SAB shares dipped 1½p to £43.77½.

By Ben Martin

Source: The Telegraph

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