Suitor InBev Scolds Anheuser-Busch

The Belgian brewing giant reacts to the Bud brewer's overtures to Grupo Modelo.
Author:
Publish date:

InBev said Sunday that Anheuser-Busch's (BUD) - Get Report reported overtures to Grupo Modelo could have an "adverse" effect on the Belgian brewing giant's $46 billion bid for the maker of Budweiser beer.

The letter from InBev CEO Carlos Brito to Anheuser-Busch CEO August Busch IV states that InBev's $65-a-share offer was based on its valuation of the St. Louis-based company's current assets.

After Anheuser-Busch acknowledged last week it would evaluate the InBev offer, it reportedly began talks about a possible merger with Mexico's Grupo Modelo, maker of Corona. Anheuser-Busch has an approximate 50% nonvoting stake in Modelo.

"As we indicated in our letter, we are committed to entering into a constructive dialogue with you to achieve a friendly combination of our two companies," Brito wrote. "We also stated that we have the greatest respect for Grupo Modelo and its management and look forward to the opportunity to work with them to explore possible ways to expand the availability of the Grupo Modelo brands outside of North America.

"We have read the recent press reports suggesting that you may have approached Grupo Modelo regarding a possible transaction between Anheuser-Busch and Grupo Modelo or affiliated entities," Brito continued. "In light of the reports, we believe it is important for you and your Board to understand that our proposal to combine with Anheuser-Busch by means of acquiring all Anheuser-Busch outstanding shares for $65 per share in cash is made on the basis of Anheuser-Busch's current assets, business and capital structure.

"Accordingly, we would expect that prior to proceeding with any alternative transaction, especially if your shareholders will not be given the opportunity to vote on it, you would first fully explore our offer and the potential adverse consequences any such transaction could have on the ability of your shareholders to receive our premium offer."

BUD shares closed Friday at $61.12, down 28 cents, after a surge from the mid-$50s following acknowledgement of the bid earlier last week.

This article was written by a staff member of TheStreet.com.