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Investor revolt threatens SABMiller takeover
Protests by shareholders are threatening to throw AB InBev’s £79 billion takeover of SABMiller – set to become the biggest deal in British corporate history – off the rails.
The world’s two largest brewers agreed the multi billion merger in November, with the resulting beer giant expected to be named Newco.
However according to reports by the Sunday Telegraph, investor Ash Park Capital has written to other SAB investors advising that they will be voting against the deal and has encouraged others to do the same.
Ash Park Capital’s decision to oppose the vote comes ahead of a crucial shareholder vote on Wednesday that will determine the future of the deal.
The investor joins Aberdeen Asset Management and Vontobel in their opposition, which together own around 2% the shareholding in SAB Miller. This may appear slight, however shareholders BevCo and Altria Group, which own around 40% of SABMiller’s shares and are in support of the deal, are being excluded from the vote.
Therefore SABMiller must get 75% approval from the remaining investors that control 60% of its stock, potentially making it easier for smaller shareholders to block the takeover, should they be in agreement.
The Sunday Telegraph also highlighted the fact that hedge funds account for a big portion of SAB’s shareholder register, many of which hold their stakes through derivatives and cannot vote unless they convert to shares. This would mean paying stamp duty, which could deter them from voting at all, meaning that SAB Miller will be relying on an even smaller group of investors to approve the deal.
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ABInBev received approval for the deal from the US Department of Justice in July, having already offloaded many of its brands, and SAB Miller’s, to appease competition laws in Europe, China and the US.
AB InBev’s Grolsch and Peroni have already been sold to Japanese brewer Asahi to ease competition concerns in the EU, while SABMiller’s Eastern European assets, including Pilsner Urquell, will also have to be sold. Those assets had been up for sale with a price tag of around $5 billion.
The SABMiller board has recommended that shareholders accept AB InBev’s cash offer of £45 ($59) a share, an increase from its earlier price of £44 ($58), valuing the London-listed firm at around £79 billion ($104bn).
AB InBev had been expecting the merger to complete in the second half of 2016, however tomorrow’s vote could impact this. A vote will take place on Wednesday among SAB Miller shareholders.