Anheuser-Busch (NYSE: BUD) wants to stay out of the hands of potential acquirer InBev. It seems willing to go to great lengths to do that. Shareholders of the brewery may get crushed in the process.
To get itself out of its jam, Anheuser-Busch has approached Grupo Modelo, the big Mexican brewer, about a merger. The American company already owns about half of the Modelo. According to The Wall Street Journal, "Acquiring the rest of the Mexican brewer could make the combined company too expensive for InBev."
A Modelo deal may help the Busch family keep their jobs, but the shareholders will almost certainly get hammered.
The InBev offer for the company is $65. Looking at a chart of Anheuser-Busch shares going back to 1983, the stock has never traded anywhere near that level.
In some ways the Anheuser-Busch move looks like Yahoo!'s (NASDAQ: YHOO) rejection of the Microsoft (NASDAQ: MSFT) buy-out offer. Shareholders are never going to get this kind of premium again. The "founders" get to stay in charge.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
6-13-2008 @ 9:27AM
Itguy08 said...
That's good. Shareholder greed is responsible for ruining many companies. It forces them to look at the short term rather than the long term good for the company. Short term thinking is what has gotten us in the messes we are in now as a country.
I applaud Yahoo and A-B for resisting the money and ensuring that the workers (along with customers, the real people in charge of the company) are taken care of. It's a set of balls you don't often see any more.
6-13-2008 @ 12:11PM
Marcy said...
I'm a BUD shareholder and I agree with Itguy. This is a well-run company in the hands of its founders. It's also a unique iconic American company -- looking at the big picture, I'd prefer to see it stay as is.
6-18-2008 @ 10:26PM
James said...
Anyone who visits the web home pages of these two companies will see the big difference in strategy. Inbev talks only of cost saving, profitability, globalization, all short term goals. A-B talks about quality foremost. Inbev will strip A-B of assets,people,quality,charity,and anything else that doesn't have a ROI. They have a history of slash and burn and the only way they continue to make profits is by acquiring other brewers. Sooner or later they'll have to run the business,good luck