BUD price slips backward again
Anheuser-Busch shares fell almost 4 percent to $63.50 during today’s turmoil on Wall Street. The selloff leaves BUD more than 9 percent below the $70 a share that InBev has agreed to pay, in cash, for all of A-B. InBev reiterated today – after its shareholders gave 99.9 percent approval to the deal – that its financing remains solid.
The only hiccup is that Fortis, one of the banks in InBev’s lending syndicate, had to be bailed out over the weekend by the governments of Belgium, the Netherlands and Luxembourg. But it’s not even clear whether Fortis will have to pull out of the syndicate, and it’s certainly a stretch to think its rescue could cause the whole package to collapse.
Moody’s also downgraded A-B’s credit rating today, but that was expected. And it assigned InBev an investment-grade rating, a crucial piece of CEO Carlos Brito’s financing plan.
The deal is supposed to close by year’s end, which means a pretty nice annualized return for anyone who buys at today’s price. See the comments on our previous post for some readers’ expected-return calculations.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
I am wondering why, anyone would be willing to give up A-B for such a small gain vs. holding the stock over time and letting it grow. Case in point; 1) I have owned A-B share since they went public, my return on just the dividend is 141% a year, plus I still own the stock! 2) A-B consistantly increases it dividend, 3) it is currently paying better than T-bills - if you are a recent buyer of A-B, and A-B pays a lot in Local, State, and Federal tax - much of which will be lost as INBEV gleans all of the profit out of the company. 4) A-B is a slow and steady money maker, and is on the plus side of growth this year, unlike most of the funds that own A-B that have complained about its lack of performance, including Warren Buffett. Selling now, right when A-B is gonig into its next level of growth is short sighted. So some folks will make a little bit on buying today only - but will give up a huge payday over the next five,ten, 20 years with an independent A-B
Most of the mutual funds that own A-B own it because it is a conservative investment, slow and steady. Every blue chip has a time when growth is slow, or not reflected in the stock price, exapmles of Coke in the 90’s, IBM in the 80’s. Selling out to INBEV is basically flipping ones finger at the true wisdom that is the fabric of our country and the long term plan of A-B. Has teh management made mistakes, yup, but they have made great investments and planned well. A-B is the largest selling beer in China, A-B is kicking the market with Bud Light Lime, and the new A-B American Ale, it has raised it dividend, and is growing in the 3rd quarter…INBEV has not grown in some time, as they have run out of places to cut.
Fortis is only one of the problems with this deal, Bank of Scotland - who’s stock price is down over 61% this year, may have to be taken over, or merge, Deustsche Bank is being watched, the secondary market is frozen, the cost of money is on the rise, and Standard and Poors has downgraded BUD to just above investment grade (for the first time ever), and given INBEV a below investment grade rating. Why would anyone want to sell a surew thing to INBEV instead of keeping it for themselves? Lets keep our BUD, and have many happy years of great returns along with pride of ownership.
Dave in Ballwin: Whether the financing comes through or falls apart will be a test of the credit markets specifically because InBev’s financial arrangements are with a consortium of banks, several of which have already been partially taken over, or otherwise bailed out by their governments. Depending on what the central bankers and finance ministers do this weekend in Washington, I would say the odds of this happening are as good as 80-20 and as poor as 50-50.