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06.26.2008 4:46 pm

Is the A-B board stalling, holding out or tilting at windmills?

St. Louis Post-Dispatch
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Today the Anheuser-Busch board of directors rejected a bid by InBev to buy the St. Louis brewer for $65 a share. The board said the offer undervalued A-B. According to our story, board chairman Patrick Stokes said:

The proposed price does not reflect the strength of Anheuser-Busch’s global, iconic brands Bud Light and Budweiser, the top two selling beer brands in the world, with Budweiser selling in more than 80 countries today.

One might look at the board’s stance this way: We might be willing to sell the company — but not at the price you offered.

So is the board holding out for a better price? Or is it sincerely resisting a takeover attempt by the Belgium brewer? Is that a fruitful effort by A-B’s board? Or, realistically, is there anything they can really do to stop a takeover?

132 comments

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I don’t understand all this talk about “American companies” and “foreign companies.” AB became a global company when it started selling and producing beer overseas. Most large companies (and many small) are now global, so it makes sense that mergers and acquisitions are becoming increasingly global. Business is about competition and survival of the fittest. St. Louis shouldn’t rely on AB so much; it should do more to attract growing industries and businesses.

— Ed
7:37 am June 29th, 2008

I think an InBev takeover is inevitable. AB is just trying to squeeze as much out of the foreign brewing behemoth as possible. InBev covets AB, and they’re willing to offer much more for the brand. Trust me, soon we’ll be calling Anheuer Busch “Inheuser Busch”.

— Kyle
8:12 am June 29th, 2008

The board at AB and especially Busch No. 4 are idiots. They should accept the offer now instead of holding out for more cash. The more In-Bev pays the worse it will be for the company down the road. Public companies should never be run by multiple generations of the same family. Just look at whats happened to Motorola and Ford to list a few examples. The Busch family failed the company and the share holders a long time ago. Good riddance to them after In-Bev takes over.

— k
11:57 am June 29th, 2008

I’m shocked none of you replied to my earlier suggestion. Perhaps because it was buried in the 2nd paragraph of my comments. Here it is again:

Why not everyone buy only Budweiser products so the stock shoots up so A-B is too expensive? You’ll be buying from the only large American brewrey that’s still American owned, helping local jobs at the STL brewery and the local distributors, and to boot we show those damn Belgians who’s boss. A-B’s share in the USA is under 50%, so if everyone went on a “buy only A-B” kick their sales would double and their stock would probably go to $100. Now that’s what I call a darn good idea that’s a win-win-win, for St. Louis, for A-B shareholders, and for the good ol’ USA!

I have another comment about those who said they’ll drink Miller Lite or Coors if A-B gets bought by Inbev. Miller was bought by South African Brewery a few years ago, and they renamed the company SABMiller. Then Molson merged with Coors and they renamed it MolsonCoors. So if you switch to Miller or Coors, you are not only switching to a company no different than Busch-InBEV would be, but they have no breweries here, so it’s 100% counterproductive to do this. It would be like cutting off your nose to spite your face. Think about it!

— James
5:34 pm June 29th, 2008

I am very proud to live in a country that has corporations like Anheuser Busch Inc. That do not just rollover for foreign investors. Anheuser Busch is an “Iconic” American owned company that brews and packages some of the United States most desired and drinkable beers. Anheuser Busch produces the most sought after beers both in the United States and other countries. I will never drink another Budweiser, Bud Light, Michelob or any other Product that Anheuser Busch makes if a foreign company takes over our heritage brewer. (Or whatever InBev decides to call it if they win.) AB also owns 50% of Grupo Modelo (Corona), 27% of Tsingtao in China, 100% Crown International Brewer in India, Sea World, Busch Gardens and many other subsidiaries. They work hand in hand with their wholesalers also.
Hostile Takeover is not the answer here.

— BudGirl11
8:08 pm June 29th, 2008

I agree whole heartedly with you James. We need to keep buying only Anheuser Busch products which in turn will keep the American dollar in America. I would think that this would be in every consumers mind right now. Our dollar is getting weaker and the entire time we are letting foreign companies gobble up our companies and sending the profits over to places like BELGIUM.
Keep our only AmericanBrewer here in America along with our hard earned money. Good job in protecting our shareholders best interests AB.
Buy BUDWEISER, BUD LIGHT, MICHELOB; buy Anheuser Busch products forever.

— BudGirl11
8:16 pm June 29th, 2008

I don’t think the A/B board is holding out for a higher price, I really believe they would say no to $75 or even $80 a share. This company knows how to sell beer. Their marketing is second to none, their distribution system is excellent. I believe the board really wants to take this company into it’s next phase
People make the claim that they have been slow to expand, but I don’t believe the comparisons are equal, Inbev’s growth has come through acquisitions and mergers, they are not brewers, just a conglomerate of once independent brewers. The same is true for SAB Miller. A/B for the most part is expanding world wide using their own product line, building breweries in India, China, and I believe one planned for Mexico. The potential in China is staggering.
I hope they do make things too difficult for Inbev, because I believe going the “hostile” route would be a big mistake for Inbev, and detrimental to the reasons they want A/B, in the first place. Brand name, distribution, marketing skills and consumer loyalty.
To you that say that this company has been stagnant, perhaps, but it has payed increased dividends every year for the last 10 that I can remember. You don’t buy a stock like A/B for a quick buck, you buy it for long term investment. A/B made it through prohibition, depressions, and wars, getting stronger all the time, it’d be a shame for them to go down like this.

— R
11:57 pm June 29th, 2008

Regarding Britos’ open full page letter

What won’t change? Forgive us for being skeptical. The City and Region off St. Louis has heard all of this before. Boeing, Southwestern Bell, Macy’s (just to name a few) have all made similar pledges and appeals over the last 15 years. WITHOUT EXCEPTION, jobs have been lost, corporate offices have been closed/moved, and financial/ in kind support to the community has vanished. We all personally have been impacted directly or indirectly by these changes. Most recently, Macy’s promised to keep jobs here in St. Louis after buying May Company. To the contrary, in less than two years, Macy’s closed their corporate offices here in St. Louis. Why? There are many reasons: cost cutting and consolidation, St. Louis’ lacking the global prestige or advantages of a larger or coastal city, tax breaks elsewhere. etc. What was not a factor in these decisions was “time-honored institutions, and deep roots in the community” or a “long standing tradition of giving back to the community.”

No, what mattered was the bottom line of the corporation over the health of the community. And all the examples mentioned above were American owned companies. In the world of this global economy, do you really expect anyone to believe that your intentions are altruistic? That your allegiance is to a community over your share holders? In this, your reputation precedes you. If this were true you wouldn’t be laying the ground work for a hostile taker over. Take your best shot, but spare the insult to the community’s intelligence with P.R. stunts like full page ads promising everything and guaranteeing nothing.

It’s ALREADY changed.

— JackR221
9:28 am June 30th, 2008

Right on, Lisa!

— Tim
11:52 am June 30th, 2008

We hear how great AB as an employer and corporate citizen. Still they sell beer so not really all that saintly. And when push comes to shove this comes to making money for shareholders. Now what is AB doing–selling aspects of the business…cutting jobs…trimming benefits–all to make people believe that the stock price will go up so they won’t sell to InBev. I guess now is all is boils down to is whether the enemy that you know is better than the one you do not.

AB is already changing for the worse–soon it will matter less whether InBev takes over.

If I had my drothers, AB would remain AB as it was and is–but since this cannot happen–I am left with no answers and I still don’t know what drothers are anyhow.

— Marc
4:59 pm June 30th, 2008

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