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InBev pressing to oust Anheuser board

Bloomberg News

July 8, 2008

InBev will ask Anheuser-Busch shareholders to oust the U.S. brewer's board after it rejected InBev's $46.3-billion hostile takeover offer as too low.

InBev is seeking to use a process outlined in Anheuser-Busch's bylaws that allows shareholders to vote on a new board without a meeting, the Belgium-based brewer said yesterday in a U.S. regulatory filing. Anheuser-Busch called the maneuver "self-serving" and said it will ask shareholders to ignore it.

Anheuser-Busch, the maker of the 132-year-old Budweiser beer, rejected InBev's offer of $65 a share on June 26, saying it undervalued the company.

The Belgian brewer wants to replace chief executive August A. Busch IV and other directors with a board including his uncle, Adolphus A. Busch IV, who has urged acceptance of the bid.

"It's getting less likely that InBev will increase its offer," said Wim Hoste, an analyst at KBC Securities in Brussels. "This is a way of keeping up pressure. The board of Anheuser-Busch in its current form will start to talk to InBev in a more friendly way, or a renewed board could be more positive."

The directors may be replaced with the permission of holders representing more than half the shares outstanding, InBev said. The brewer will wait for the Securities and Exchange Commission to review its proposal before asking shareholders to vote, said Nina Devlin, a spokeswoman for InBev at Brunswick Group Llc.

While calling InBev's nominees a "self-serving effort," Anheuser-Busch told the Belgian brewer that it would be "open" to considering a higher bid. It, too, will mail ballots to shareholders asking them to vote to retain the current directors.

The conflict moved Barack Obama, the Democratic nominee for U.S. president, to speak against the proposed takeover during a campaign appearance in St. Louis.

"I do think that it'd be shame if Bud is foreign-owned," Obama said. "We should be able to find an American company that is interested in purchasing Anheuser-Busch if, in fact, Anheuser-Busch feels that it's necessary to sell."