BUD spread gets even wider
Some financial experts measure the financial crisis’ severity by the TED spread, which is a measure of banks’ borrowing costs. Norm Conley, of JAG Advisors in Ladue, tells me that the BUD spread might be an equally valid measure of panic in the market. That’s the difference between $70, the price that InBev has agreed to pay for each Anheuser-Busch share, and the current market price.
Yesterday, the BUD spread was almost $9. This morning, it’s $10.50, the widest it’s been since the InBev deal was sealed in July. An investor who buys the stock today can reap a gain of 18 percent in less than two months – assuming that the deal goes through. Even as InBev puts its U.S. leadership team in place, investors are marking down the probability of those leaders actually taking control.
This isn’t unique to Anheuser-Busch. Conley points out that shares of Genentech, which also has a firm, all-cash acquisition deal on the table, have followed a similar trajectory. Roche Holding agreed in July to pay $89 a share for all of Genentech, which is trading are below $75 today.
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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. 
What happens if the deal tanks and AB is left with a gutted management structure. Will the Busches just stand buy and let Peacock run it? And even if they do, the management uncertainty would be very destabilizing to such a large organization. I was very surprised to see the new management team announced a month before AB shareholders have even voted on the deal and with the credit markets in such turmoil (as reflected by today’s increasing price spread).