So far, we had InBev putting in the offer and Anheuser-Busch taking its sweet time to reply while trying to thwart the offer by talking to Groupo Modelo. If Anheuser can manage to buy the remaining 50% of Modelo, it would be too big for InBev to swallow. Thursday, though, Anheuser finally replied. Unanimously, no less. I wonder if somewhere around that boardroom full of directors, one at least represented the interests of BUD's second largest shareholder, Warren Buffett's Berkwhire Hathway (NYSE: BRK.A).
In response, InBev said it might ask Anheuser shareholders to unseat the whole board. InBev filed suit "seeking a judgment to confirm that shareholders acting by written consent could remove all of Anheuser's directors without cause." I'd say they might even have cause. The $65 per share offer represented a 35% premium at the time. What's so "financially inadequate" about that?
Well, as Anheuser Chairman Patrick Stokes said, the offer undervalues the Bud Light and Budweiser brands, which he calls iconic. Whatever he calls them, they are the top two selling beer brands in the world. He also said InBev undervalues BUD's growth prospects. Well, if Anheuser could restructure on its own, it should have done so by now and not wait until it was up against the wall with its shareholders. The plans it has and wants to put in place will take a while to bear fruits no doubt.
As InBev has stated, it'd rather take over BUD under friendly terms (a bit of an oxymoron there, but that's the business world). Otherwise, it could either take the tender offer directly to shareholders or get into a fight similar to that Icahn has on his hands with Yahoo! Inc. (NASDAQ: YHOO)'s board, which may not be pretty. Replacing a whole board for a new slate can, and will, get ugly. Or it can do both.
If InBev decides to play nice after all, it may have to raise its bid. Maybe they should all chill and drink a Molson (NYSE: TAP). Things will look better after a few...
When I heard that the CEO of Miller Brewing Co. said Thursday he sees a trend of consumers buying cheaper beers, I was wondering whether consumers might also be switching not just from more expensive beers to cheaper ones, but from more expensive alcoholic drinks to beer, which tends to be cheaper.
Unfortunately for Miller, for which its parent SABMiller PLC reported earnings Thursday, so far the increase in sales of more economic beers has been at the expense of the more expensive ones. So my theory isn't much of one after all. I guess that food and gas still have a higher priority than beer, and we all know how much the price of these have risen lately.
Denver-based Molson Coors, one of the world's largest brewers, said net income for the quarter that ended March 30 totaled $37.1 million, or 20 cents per share, compared with $4.4 million, or 3 cents per share, in the year-ago quarter. Excluding a charge related to a joint venture, the company earned 32 cents per share. Net sales after excise taxes rose 10% to $1.36 billion. Analysts polled by Thomson Financial predicted a profit of 28 cents on net sales of $1.31 billion.
Molson Coors shares rose $3.94, or 7.4%, to $57.10 in afternoon trading after rising to a 52-week high of $57.74 earlier in the day.
Las Vegas-based MGM Mirage said earnings fell 30% to $118.3 million, or 40 cents per share, compared with the same quarter a year ago. Revenue for the world's second-largest casino company slipped 3% to $1.88 billion, and fell short of expectations of analysts surveyed by Thomson Financial. They had forecast net income of 43 cents per share on revenue of $1.9 billion.
MGM shares rose 6.6%, or $3.23, to $51.85 in trading Tuesday, but fell to $51.60 in after-hours trading.
While these results may suggest that consumers are spending their increasingly scarce entertainment dollars closer to home, its worth noting that Walt Disney Co. (NYSE: DIS) Tuesday reported a 22% rise in its Q2 net profit.
Day one of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Management Advisory Committees meeting: Purdue Pharma's NDA for Oxycontin.
Anadarko Petroleum (NYSE:APC) to report Q1 earnings; conference call Tuesday at 10:00am.
Tuesday, May 6
Day two of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Mgmt Advisory Committees meeting: Cephalon's (NASDAQ:CEPH) sNDA for Fentora.
Molson Coors (NYSE:TAP) to report Q1 earnings; conference call at 12:00pm.
MOST NOTEWORTHY: Cardionet, Molson Coors and TIM Participacoes were today's noteworthy initiations:
Cardionet (NASDAQ: BEAT) initiated with an Overweight, target $29 at Thomas Weisel, who believes Cardionet is well positioned for future growth in the ambulatory monitoring market.
MOST NOTEWORTHY: Schering-Plough, Emergency Medical Services and SLM Corp were today's noteworthy upgrades:
Banc of America upgraded shares of Schering-Plough (NYSE: SGP) to Buy from Neutral on valuation, as they believe current levels already reflect significant cuts to the company's cholesterol franchise from ENHANCE.
JP Morgan upgraded shares of Emergency Medical Services (NYSE: EMS) to Overweight from Neutral following the company's Q4 results.
Friedman Billings upgraded shares of SLM Corp. (NYSE: SLM) to Outperform from Market Perform and raised their target to $25 from $23 to reflect the company's strengthened capital position, diversified sources of income, and attractive valuation.
General Motors Corp. (NYSE: GM) posted a fourth-quarter loss of $722 million, or $1.28 a share , after a year-earlier profit on rising costs in North America. Sales fell to $47 billion. For 2007, it posted a record net loss of $38.73 billion, or a loss of $68.45 per share. GM, eager to lower wages is offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers. GM shares are down 3.3% in premarket trading.
Teva Pharmaceutical (NASDAQ: TEVA), reported fourth-quarter earnings rose 24% to $570 million, or 69 cents a share, beating estimates of 66 cents per share. Sales grew 13% to $2.58 billion from $2.28 billion. Still, TEVA shares are down nearly 1.7% in premarket trading.
Time Warner (NYSE: TWX) was upgraded at UBS from Neutral to Buy. Shares are up over 1.1% in premarket trading.
MOST NOTEWORTHY: Molson Coors, Knightsbridge Tankers and the Railroad sector were today's noteworthy upgrades:
Banc of America upgraded shares of Molson Coors (NYSE: TAP) to Buy from Neutral as they believe the company's joint venture with SABMiller (OTC: SBMRY) could nearly double North American profits and that risks are largely priced in shares.
Jefferies upgraded shares of Knightsbridge Tankers (NASDAQ: VLCCF) to Buy from Hold on valuation and finds the dividend yield attractive at 12.4%.
Where can you find the "Wall Street of the West?" In Colorado, of course -- specifically, Denver's 17th Street financial district.
Colorado's economy has come a long way from its foundation on trapping and mining. Denver's location, equidistant between Los Angeles and Chicago, between Seattle and New Orleans, has helped the Centennial State become the economic center of Rocky Mountain states -- even Denver's time zone and elevation help it keep in touch with the rest of the world. It's no wonder there's a large federal government presence in the state (U.S. Air Force Academy, NORAD, NOAA, Denver Mint, U.S. Geological Survey).
In the competitive brewing business, sometimes it's just hard to play nice. Over the weekend, Miller Brewing Co. -- a subsidiary of SAB Miller -- launched what appears to be a potential salvo in a ramped-up version of the "beer wars" of yesteryear.
A new commercial for Miller Lite, which debuted during football games and NASCAR events, uses the iconic Dalmatian-and-Clydesdale image -- used for decades by Anheuser-Busch (NYSE: BUD) -- to pay tribute to its own number-two product. The Clydesdale-drawn wagon features a sign advertising "Miller Lite. Half the carbs of Bud Light." At the end of the commercial, the dog exits the wagon for a Miller truck, which speeds away.
BUD advertising officials were quick to respond, taking out a full-page-ad in yesterday's USA Today, imploring Miller to "keep up the bad work." Launching back, Miller representatives revealed plans to continue hammering home the facts that Miller Lite has "fewer carbs and more taste."
With earnings report rolling out one after another, there's hardly time to pause to enjoy a burger and a beer. Among companies reporting next week are Burger King Holdings Inc. (NYSE: BKC) and Molson Coors Brewing Co. (NYSE: TAP), and here are a quickie earnings previews for them.
Burger King has beat Wall Street earnings estimates for the past four quarters. When it reported fourth quarter 2007 results back in August, earnings were 29 cents per share, beating Wall Street estimates by two cents, and 11cents more than in the same period of the previous year. For the full year, earnings were $1.11 per share, again beating expectations by a pair of pennies. For the current quarter, analysts surveyed by Thomson Financial are expecting 33 cents per share.
The most recent analysts' consensus recommendation is to buy BKC, and has been for the past year. The share price has been climbing since the slump after excitement of the IPO wore off, and it reached a 52-week high of $27.73 at the close on Friday.
For news about Burger King and its rivals that could influence Burger King's results, check out BloggingStocks' Burger King coverage.
What happens when two companies make similar products, sell to similar customers in a limited marketplace, and use similar raw materials? Aside from being able to trade on your good name, the real difference in profit potential between the market leader and the competition is the size of your operation. Anheuser-Busch, the leader in American beer sales, has been able to control its almost 50% share of the market because none of its competition could compete with its operating costs -- especially with regard to distribution -- because no other companies were capable of working on the same scale.
But that's all about to change. Molson Coors Brewing Company (NYSE: TAP), recently announced that it is merging its U.S. and Puerto Rican operations of SABMiller, which will give the new company (MillerCoors) a 30% share of the American beer market -- and finally make its operation competitive with Anheuser-Busch (NYSE: BUD). Economy of scale in both production and distribution means that the company estimates a savings of $500 million annually in expenses (and as Molson's current annual operating expenses hover around $220 million, that's a LOT of savings) -- putting the company in a great position to brew up some real trouble for Busch.
MOST NOTEWORTHY: Abbott Labs, Barclays, SanDisk, Mission West Properties and Texas Instruments were today's noteworthy downgrades:
Wachovia downgraded shares of Abbott Labs (NYSE: ABT) to Market Perform from Outperform reflect several challenges to the company's key franchises. In particular, Wachovia cites the potential delay of the drug-eluting stent Xience launch in the U.S. and decelerating growth of Humira.
ABN Amro downgraded shares of Barclays (NYSE: BCS) to Hold from Buy to reflect the capital markets, lower UK bank non-interest income and higher bad debts.
Oppenheimer downgraded shares of SanDisk Corporation (NASDAQ: SNDK) to Neutral from Buy as they expect many of the advantages that drove shares to unwind in Q4 and into 1H08.
Mission West Properties (NYSE: MSW) was downgraded to Hold from Buy at Stifel, as they now believe the possibility of a sale is 50%/50% and could be pushed back to 1H08.
Think Equity downgraded shares of Texas Instruments (NYSE: TXN) to Source of Funds from Accumulate as they believe competition could hinder Q4 and 2008 growth for wireless.
When I heard that the CEO of Miller Brewing Co. said Thursday he sees a 
On Tuesday, 
.gif){kind=logo}
.gif){kind=logo}
.gif){kind=logo}
General Motors Corp. (NYSE: .gif){kind=logo}
Where can you find the "Wall Street of the West?" In Colorado, of course -- specifically, Denver's 17th Street financial district. 
In the competitive brewing business, sometimes it's just hard to play nice. Over the weekend, Miller Brewing Co. -- a subsidiary of SAB Miller -- 
Burger King has beat Wall Street
What happens when two companies make similar products, sell to similar customers in a limited marketplace, and use similar raw materials? Aside from being able to trade on your good name, the real difference in profit potential between the market leader and the competition is the size of your operation. Anheuser-Busch, the leader in American beer sales, has been able to control its almost 50% share of the market because none of its competition could compete with its operating costs -- especially with regard to distribution -- because no other companies were capable of working on the same scale..gif){kind=logo}
The week in preview: New quarter earnings kick-off
Comfort Zone Investing: Keep your recovery expectations real
Will Americans have to slim down to fit into their cars?
