David Nicklaus: On the Anheuser-Busch front, the news of the day is an InBev statement in which CEO Carlos Brito vows to "pursue all available avenues that would allow Anheuser-Busch shareholders a direct voice in the process." Does that mean a hostile bid? Probably, but not yet. Brito also says that his "strong preference" is for a friendly combination, and that the $65-a-share price rejected by A-B's board is a "full and fair value" for Anheuser-Busch.

What's next? Who knows. Meanwhile, let's get to your questions. And if anyone wants to throw in a question about the Chrysler layoffs, I'll tackle that too.

destroyers777: David-Can you detail how a foreign company can fill suit in US Courts asking to have the board of a US company removed? If it is just that easy, why cant I fill a suit to have Pepsi, Microsofts, etc.. Board removed?

David Nicklaus: First of all, InBev isn't asking the Delaware court to throw out the A-B board. It's asking for a procedural ruling on a rather technical issue. Basically, it's asking whether all 13 directors, or only 8, are subject to removal by the written consent of shareholders. Even if the court says all 13 are vulnerable, InBev would have to get a majority of shareholders to vote for their removal.

I'm not sure where Pepsi and Microsoft are incorporated, or what their bylaws say about the written consent process. If they're similar to A-B's bylaws, then, yes, you could attempt to convince other shareholders to sign a petition that would oust some or all of the directors. It would cost you a lot of money, though, to hire lawyers and send out mail to all shareholders.

Chris: Hello David,

I keep hearing rumors that InBev is going to eventually go hostile with their bid. My question is, aren't the shareholders worried that the price will go too high and major cuts will have to be made to recoup those losses? I hope that with the latest proposal the shareholders will give it a chance. I highly doubt that they will but there is always hope. I don't know what it is but there is something shady about Brito. I may be wrong about him but my instinct says I'm not.

Regards,

Chris

David Nicklaus: As long as the offer is all cash, the shareholders aren't worried about anything except whether the check will clear the bank.

jeff: I do not understand these lawsuits that are being brought by these pensions. Some of them are unions that are against what inbev is trying to do. I understand they are run by money managers but can the group threaten to pull their money out

David Nicklaus: The suits are brought by the pension funds themselves, not by some faceless outside manager. In general, the union pension funds are big proponents of proper corporate governance -- they want companies to play by the rules of the game, with independent board members and so on. Union pension funds have been critical of A-B's board on these issues in the past -- they pushed hard for annual election of all directors, for instance.

I talked to Dan Pedrotty in the AFL-CIO investment office about these issues (although we didn't discuss the lawsuits specifically) and he said the union wants companies to provide good jobs, but it also wants them to have good corporate governance. In the overall scheme of things, he thinks the two goals are compatible -- well-governed companies will be better employers, in general, than ill-governed ones.

The pension fund trustees also have a fiduciary duty to their members. They themselves could be sued if they let any other value, such as union solidarity, get in the way of that fiduciary duty.

Louis: If the vote does go to the shareholders what percentage would have to approve it?

David Nicklaus: Basically, 50 percent plus one. The most likely course for a hostile effort isn't a direct vote on the deal, but rather two other actions, either separately or in tandem:

1. An action to oust A-B directors by written consent. If more than half of the shares vote to replace more than half of the board, then the new directors could vote to begin negotiations with InBev.
2. A tender offer. This would involve InBev directly offering to buy shares for a stated price, such as $65. If InBev buys more than 50% of the shares in this way, it would then have more than 50% of the votes for electing directors.