InBev speculation

Jack Curtin writes of an interesting take on the current state of the InBev buyout of Anheuser-Busch. There is an outside chance that the purchase could turn the other way around.

Harry Schuhmacher writes in this morning’s Beer Business Daily that InBev will have to pay Anheuser-Busch stockholders the promised $70 a share even if its financing falls apart per an analysis of an A-B proxy statement.

There is no contingency “out” for the Belgian brewer. A-B would have a multi-billion dollar claim which would be roughly equal to current InBev value.

In this strangest of financial environment, in other words, should the InBev banks bail out, the result would likely be A-B buying InBev rather than the reverse.

And from the Saint Louis Post-Dispatch:

Several analysts say the gargantuan buyout has become a heavier burden for InBev. The company's stock has been hit by slumping stock indices, a stronger dollar and the prospects of a big stock offering that would dilute shareholders' ownership.

InBev shares have dropped by more than a third since the A-B deal was announced in mid-July. A-B is now worth twice as much as InBev by market value — the stock price multiplied by the number of shares.

The Belgian company looks like "a minnow swallowing a whale," Gimme Credit bond analyst Craig Hutson wrote last week. InBev's shrinking value meant it would have had to flood the market with shares to reach $9.8 billion. Its main shareholders in Belgium and Brazil would have lost control of the brewer. The plan was shelved two weeks ago.

InBev, A-B deal still on track despite credit market woes
By Jeremiah McWilliams
ST. LOUIS POST-DISPATCH
10/29/2008