”We will challenge InBev’s claim in their lawsuit that they can remove directors without cause,” Busch said.

************ 

There’d been some speculation in recent weeks that A-B might try to sell its amusement parks or bottling and packaging facilities as part of a restructuring. That’s not on the table, Busch and Baker just said. Given the market, and the company’s plans, they wouldn’t make enough money doing it.

“A sale after tax would not be of benefit to our shareholders,” Busch said.

They think the entertainment division will grow at least 9 percent each of the next few years, and exposes new customers to the Anheuser-Busch brand. And owning their own packaging plants helps the company keep costs in line.

“There’s no financial case for selling those two,” Baker said. “The value estimated in our plan is better than we’d get from selling them.

************ 

Now we’re in the question and answer part of the call, and analysts are trying to pin down Busch and Baker on A-B’s price. The executives are being cagy, not saying they won’t sell, but not naming a price, either.

 “We’re not putting a price on the company,” Baker said. “We’re outlining a case for you today on what our strategic plan can deliver and we’re quite optimistic that it will deliver greater value than the $65-a-share offer.”

When another analyst followed up with a question if the board is still willing to negotiate with InBev, Baker referred him to the statement issued yesterday, which says the board “will continue to consider any strategic alternatives that would be in the best interests of Anheuser-Busch shareholders.”

********** 

Baker and Busch both indicated that A-B is willing to continue talking with InBev, but said that the current offer “clearly undervalues” their company.

“Paying $65 a share would be an excellent deal for InBev shareholders,” Baker said. “But $65 a share is clearly inadequate and would represent a transfer in value from A-B shareholders to InBev shareholders.”

They both spoke several times about A-B’s “iconic” brands and dominant position in the profitable U.S. market as key assets that InBev was undervaluing.

 “Anheuser-Busch is a truly unique brewing asset and the acquisition of A-B would be unlike any other brewing acquisition given our iconic brands and our substantial market share in the most profitable beer market in the world,” Baker said.

Baker said the new strategic plan will give A-B “double-digit” earnings per share growth starting next year.

******* 

A-B will offer “early retirement packages to” some older employees in the third quarter, with the hopes that 10 to 15 of roughly 1,300 eligible employees take them, CFO Randy Baker just said. He gave few details, but indicated the company hopes to cut roughly $300 million in labor and selling/general/administrative costs.

It also plans to cut the costs of the goods it sells by roughly $700 million through efficiencies and through its supply chain.

******* 

More from Busch, on brands and on an expanded “Blue Ocean” cost-cutting plan.

“Our business is built on brands,” Busch said. “Our brands were built through years of investment and ingenuity,” he said. “Today we continue to increase the value of these brands through marketing and innovation.”

He also said the company will step up its “Blue Ocean” cost-cutting plan, which was planned to slice more than $400 million from the company’s spending over the next four years. Now, Busch said, the target will be “over $1 billion in savings, with the majority this year and next.”

They can do this, he said, because of the hard work of employees.

“Our more than 30,000 employees are truly acting like owners,” he said.

The company also expects to increase beer prices, gaining 4 percent per barrel this year and next.

***** 

In his opening statement, August Busch IV, Anheuser-Busch CEO, says InBev’s offer of $65 a share is too low, “too low relative to the value compared to other transactions in the beer industry and involving iconic brands.”

He also says the cost reductions planned by InBev at $65 a share “assume cost reductions Anheuser-Busch can achieve independently.”

Then he moved on to discuss the qualifications of the board, which includes current and former executives from companies like global companies like AT&T, IKON, JP Morgan.

“This is a board composed of some of America’s top business leaders,” he said.

For more details and background, here’s our story from this morning’s paper on yesterday’s announcement that it will turn down InBev’s $65-a-share takeover bid for the brewer.

Return to this blog to read highlights from the conference call. Or you can listen in to the call yourself by clicking here.

Southwest Airlines will begin one daily flight to Fort Myers, Fla., on Nov. 2, part of tweaks to its fall schedule released today. The low-cost carrier is bucking an industry-wide trend toward fewer flights by adding a net of nine new routes this fall.

American now flies one daily non-stop to Fort Myers from Lambert-St. Louis International Airport and spared that route in the cuts announced yesterday. But it has taken an axe to competitive routes here lately, ending service to three cities that Southwest also flies to from here and sharply reducing service to cities like Minneapolis and Newark where other airlines have hub operations with flights to St. Louis.

When the schedule changes announced this week take effect, American will have 115 daily flights at Lambert. Southwest will have 80.

Carey’s private practice concentrates on trial work, labor and personal injury law. He is past president of the East St. Louis Bar Association and the St. Clair County Bar Association.

The Illinois State Bar, which has offices in Springfield and Chicago, has 35,000 members.

The Government Accountability Office just released the public version of its 67-page audit of the Air Force’s controversial decision to give its new aerial refueling tanker contract to Northrop Grumman and European Aerospace and Defence Co

Here’s a link.

A quick scan of the report shows no huge surprises: The GAO last week told us of a number of significant flaws in the process – ammunition for Boeing Co. supporters who hope to force the Air Force to re-bid the $35 billion contract – but the full report contains a festival of details about what the GAO found.

Interestingly, after reading the report, several top Pentagon officials have said they feel the contract can move forward and be awarded this year, according to this report in trade publication DefenseTech. It says Pentagon acquisition chief John Young plans to tell Congress he’ll go ahead and award the contract to Northrop despite the GAO’s concerns.

If that happens, expect this contract fight to heat up fast.

Pickup sales fell 38 percent in May, according to the Associated Press, as gas prices approached $4 per gallon and buyers of work trucks reeled in spending due to the slow real estate market.

Because of the slow market, Ford said today it would delay launching its redesigned 2009 F-150 pickup by about two months, hoping to reduce inventory of the 2008 model. The vehicle is made in Kansas City and Dearborn, Mich.

Chrysler, however, said it hopes to seize on the slumping market by releasing the company’s “best truck ever,” said Stuart Schoor, a company spokesman.

“(The vehicle) gives us optimism that we’ll have the best ammunition to fight back slowing pickup market sales - a new product with all new features,” Schoor told the Post-Dispatch today.

The pickup, scheduled to launch this fall, will be produced in Fenton and Warren, Mich.

British financial newspaper Financial Times reported that the board will discuss InBev’s $65 a share bid for all outstanding shares of Anheuser-Busch.  The all-cash offer, estimated at $47.5 billion, is unsolicited and nonbinding.

Citing anonymous sources, the Financial Times said the board will weigh a variety of options for A-B. The newspaper said its sources say the board may press the Belgium-based brewer for a higher bid that its $65-a-share offer.

Today, A-B declined to comment on the report of a board meeting this week or the progress that that board has made on making a decision about the proposed bid.

“Anheuser-Busch’s inability to comment on it at this point should not be interpreted as support for, or opposition to the proposal. InBev and others have been discussing the proposal at length, but the Anheuser-Busch board must take the time necessary to conduct a full and fair analysis in consultation with its advisers before addressing the proposal publicly in detail,” A-B Chief Financial Officer W. Randolph Baker said in a press release. “We will not speculate on what the board’s response will be.”

Bob Nardelli told employees sales could fall to 12.5 million units for the year from 16.6 million in 2007, according to a report in the Detroit Free Press.

Most analysts projected a slow down in 2008 auto sales, but only to about 15.5 million units.

 Nardelli reportedly made no suggestions about what this decline could mean to manufacturing jobs, but Chrysler often ties production to strength of vehicle sales.

Quoting sources, the paper says  Buffett is willing to sell his A-B shares to the Belgian brewer. Buffett’s Berkshire Hathaway owns a 5 percent stake in the St. Louis-based brewer.

A spokeswoman at Berkshire Hathaway would not provide comment to De Standard for its story.

Buffett’s support for the deal could smooth the way for InBev’s effort to buy the St. Louis-based brewer. InBev is offering $65 a share for A-B.

British newspaper The Observer reported Sunday that the billionaire plans to meet with A-B CEO August A. Busch IV this week to discuss the InBev offer.

Citing its anonymous sources, The Observer reported that Buffett believes the Busch family should consider discussions with InBev rather than reject the bid outright.

 A-B shares spiked at the opening bell, hitting the $62 level out of the gate. Shares leveled off after the open and were trading around $61.85 at 10:50 a..m. Shares closed Wednesday at $58.35 prior to the announcement of the much anticipated offer. The $46.3 billion all-cash offer would end A-B’s 156-year run as an independent company, creating a global entity that would sell about one-fourth of the world’s beer.

Shares of InBev in afternoon trading in Europe were up about 9 percent at 51 euros.

Read more about this story by clicking here.

Appearing briefly on the financial network, Faber said people close to InBev told him the company had spent much of the last few weeks working on financing for the rumored deal, which could stretch to $40 billion. Bankers told him financing could be “do-able” even in a tight credit market.

Shares of Anheuser-Busch jumped sharply on the news. The stock was up $1.46 or 2.6 percent at 2:37, standing at $58.61 on the New York Stock Exchange.