US brewer Anheuser-Busch is so desperate to fend off the attentions of rival InBev that it’s now decided to sue its unwanted suitor, claiming its $47bn bid is illegal and suggesting that it’s been using ‘numerous false and misleading statements’ to win over shareholders. One of A-B’s key arguments is that InBev concealed the fact that it has an operation in Cuba. As a sweetener to the deal, InBev has promised to make A-B’s home in St Louis the headquarters of its North American operation – but under the terms of the (brilliantly-named) US Trading With The Enemy Act, Cuban businesses can’t be managed from the US. Desperate times, and all that...
That wasn’t the only charge: A-B is also accusing InBev of misleading shareholders about its financial backing, suggesting that the $40bn debt package it claims to have arranged isn’t quite as cast-iron as it suggests – the US company says there are so many strings attached that the banks involved can walk away given the slightest excuse (although pretty much every loan agreement ever signed has conditions included, so this seems a bit of a strange argument).
InBev has remained fairly tight-lipped about this latest raft of allegations, saying only that the Cuban operation is currently managed from Europe, and represents a tiny part of its business (less than half a percent, apparently). But in a takeover battle that seems to be getting more hostile with every passing week (it’s even causing rifts within the Busch family now), it’d be forgiven for being sceptical that A-B’s motives are quite as pure as it claims.
In fact, given the A-B board’s continued hostility to the bid (which it says undervalues the business), it’s not surprising that InBev is trying to have the whole lot replaced by some hand-picked alternatives, led by renegade Busch scion Adolphus Busch IV. Equally though, you can’t blame the present incumbents for trying to fight back – although some shareholders seem to think they’re acting in their own best interests, rather than those of their shareholders. One large investor even accused the company of ‘being childish’, according to Bloomberg.
Either way, the iconic US firm finds itself in the ironic position of relying on a fairly obscure Cuban operation to remain independent. Maybe those pesky Cubans aren’t so pesky after all...
In today's bulletin:
Sorrell goes hostile after TNS knock-back
Trouble building in the housing sector
We ain't Trading with the Enemy, says Bud
BBC pays price for big rises
'35 Under 35' 2008: The corporates