The UK High Court has ruled that SABMiller Plc’s two biggest investors should be treated separately to others when voting on Anheuser-Busch InBev NV’s $103-billion offer for its rival brewer, meaning that a higher level of approval will be needed for the deal to proceed.
Altria Group, Inc., and BevCo Ltd, which own about 41% of SABMiller’s stock between them, will form one class of stock for the purposes of voting. All other shareholders will constitute the other, and at least 75% must give their assent.
The split was ordered at SABMiller’s request, after some investors expressed disquiet about a so-called 'partial-share alternative', designed as a tax-friendly option for Altria and BevCo, the holding company for Colombia’s Santo Domingo family. Tobacco-maker Altria, the largest shareholder, with an approximate 26% stake, had opposed the separation in a letter to SABMiller chairman Jan du Plessis, according to evidence shown in court recently.
SABMiller shares were little changed at 4,377.5 pence at 1.34 p.m. in London, rebounding after falling when the ruling was announced. AB InBev rose 1% to €112.1.
The court decision is unlikely to derail the combination of the world’s largest beermakers, said Javier Gonzalez Lastra, an analyst at Berenberg.
“It’s bad news in that it increases the risk, compared to there only being one class of shareholders, but based on our calculations, the chances of the deal still going through are high,” Gonzalez Lastra said by phone. “From the people that have been vocally against it, it’s difficult to get anywhere close” to the number needed to stop the deal, he said.
Altria and BevCo have committed to accept the takeover. The shareholder vote will be taken at a meeting on 28 September, with trading in SABMiller shares scheduled to end on 4 October.
The value of the partial-share alternative surpassed the value of AB InBev’s cash offer, after Britain’s vote to leave the European Union caused a slide in sterling. The pound’s decline also weakened the dollar value of the takeover, causing AB InBev to raise the cash portion of the offer to £45 a share after pressure from activist investors.
“In my judgment, it is generally undesirable for there to be side agreements with large shareholders or creditors if their involvement in a proposed transaction can be dealt with openly,” High Court judge Richard Snowden said of the ruling.
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