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Anheuser-Busch rejects $46.3b InBev takeover bid

The famous Budweiser Clydesdales make an appearence in St. Louis. A purchase of Anheuser-Busch at the current price would be the biggest of a consumer company since 2005. The famous Budweiser Clydesdales make an appearence in St. Louis. A purchase of Anheuser-Busch at the current price would be the biggest of a consumer company since 2005. (Kyle Ericson/Associated Press/File 2007)
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Bloomberg News / June 27, 2008

ATLANTA - Anheuser-Busch Cos., the US maker of Budweiser beer, rejected InBev NV's $46.3 billion takeover offer three hours after the Belgian brewer made its bid hostile.

The Anheuser-Busch board unanimously agreed that InBev's $65-a-share offer was "financially inadequate," the St. Louis-based brewer said yesterday in a statement.

InBev said earlier yesterday that it plans to ask shareholders to fire Anheuser-Busch's directors. The Leuven, Belgium, company offered two weeks ago to take over the US beermaker, and yesterday's disclosure was the board's first response to the unsolicited proposal.

"We've entered into hostile territory," said Tom Pirko, the president of the Bevmark LLC consulting firm in Santa Ynez, Calif. "InBev is a very aggressive company. They don't take no for an answer."

Nina Devlin, an InBev spokeswoman who works for Brunswick Group, declined immediate comment.

Anheuser-Busch's rejection may prompt InBev, which makes Bass, Stella Artois, and Beck's beer, to raise its bid while it tries to install its own directors. A purchase at the current price would be the biggest of a consumer company since Procter & Gamble Co. bought Boston's Gillette Co. for $57 billion in 2005.

Anheuser-Busch rose 65 cents to $62 after the close of New York Stock Exchange composite trading. Before the board announcement, it had declined 41 cents to $61.35. InBev fell $2.05, or 2.8 percent, to $70.89 in Brussels, tracking declines in US and European stock markets.

Before InBev's June 11 proposal, Anheuser-Busch chief executive August A. Busch IV told the Belgian brewer that his company wasn't for sale and that "he and his board are 'committed' to remain independent,' " InBev said yesterday in a filing in a Wilmington, Del., court.

While Busch, the fifth generation to run the company, told distributors in April that the company wouldn't be sold while he was in charge, the family doesn't own enough shares to sway a shareholder vote on the board. Directors and executives hold 4.5 percent of the company's shares, according to a regulatory filing earlier this year.

InBev sued yesterday to get a ruling that it doesn't have to wait until 2009 to remove the five directors that are up for reelection that year. It said the other eight can be removed now without cause. Changes made in Anheuser-Busch's bylaws in 2006 make it unclear whether the US brewer can block the ouster of all 13 board members.

Anheuser-Busch may reveal plans to lower costs and sell off divisions to increase its stock price so it doesn't need to be acquired, The Wall Street Journal reported Wednesday.

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