Dominic Walsh, Dan Sabbagh
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InBev's campaign to buy Anheuser-Busch (AB) gathered momentum this morning after a senior member of the Busch family threw his weight behind the Belgian brewer's $47 billion (£23.8 billion) bid for the Budweiser maker.
Adolphus Busch IV, the great grandson and namesake of the company's founder, is among the new directors put forward by InBev ahead of a filing today with the US Securities and Exchange Commission to remove the entire current board.
The filing is being interpreted by analysts as a clear signal to AB investors that InBev will not raise its $65-a-share offer - worth almost $57 billion including debt - unless the board changes its antagonistic stance and agrees to hold discussions.
The Stella Artois and Beck's brewer today filed a motion nominating 13 new directors, all of whom are unaffiliated to InBev, but who would be expected to open negotiations with InBev in response to the unsolicited offer.
InBev, which owns just 100 AB shares, is taking advantage of clauses in AB's charter and Delaware law, the US state in which the company is registered, that allow shareholders to remove existing board members at any time.
The company last month filed a suit in Delaware confirming that AB shareholders have the legal ability to remove and replace not only the eight directors elected after 2006, but also the five elected in 2006.
A dismissal would require the support of a majority of AB investors in a formal vote. InBev is calling on shareholders to submit letters of support for its motion.
Adolphus Busch IV, who is the uncle of August Busch IV, the current chief executive, has previously expressed a willingness to consider InBev's proposal but his decision to back InBev in such an overt way shows a clear split in the family over the issue.
Although his nephew effectively controls the board, the wider Busch family speaks for less than 4 per cent of the shares.
The AB board formally rejected the bid almost two weeks ago and unveiled a plan to cut $1 billion in costs to fend off the predator. It has so far shown reluctance to engage with InBev directly.
Carlos Brito, chief executive at InBev, said this morning that the defence plan "entails significant execution risks and does little to address the fundamental competitive challenges the company faces in an increasingly global industry".
He added: "Our strong preference remains to enter a constructive dialogue to achieve a friendly combination that comprehensively addresses the interests of all constituents."
He said that today's move was an attempt by InBev to give AB shareholders "the opportunity to have a direct voice in the process and a say in the future direction of the company."
The alternative slate of directors put forward by Mr Brito includes Marjorie Bowen, a former managing director of Houlihan Lokey Howard & Zukin, the investment bank; James Healey, former chief financial officer of Nabisco, the food group; Allan Loren, former chairman and chief executive of Dun & Bradstreet; Henry McKinnell, former chairman and chief executive of Pfizer, the drugs maker; and Ernest Mario, the former chief executive of Glaxo Holdings.
InBev claims that any of its nominees elected to the AB board would be independent, although in its filing it admitted that each would receive $50,000 and 10 shares for agreeing to put their names forward.
InBev, which is advised by Lazard and JP Morgan, says it has lined up $40 billion of debt funding from Banco Santander, BNP Paribas, Deutsche Bank, Fortis, ING, JP Morgan, Barclays Capital, Royal Bank of Scotland, Bank of Tokyo-Mitsubishi and Mizuho Corporate Bank.
The balance would come from asset disposals and equity financing.
In an attempt to win over the Busch family, InBev has said it would turn Budweiser into its flagship beer and that the name of the combined company would "evoke the Anheuser-Busch heritage".
Its headquarters in St Louis, Missouri, would become the home of the enlarged group's North American division.
InBev wants top acquire AB for its 48.5 per cent share of the American beer market, the world's largest in terms of profits. It would also help it to boost its presence in China, the largest beer market by volume.
InBev said the combined company would be one of the top five consumer products companies in the world, with global beer volumes of 460 million hectolitres, net sales of $36.4 billion and underlying earnings of $10.7 billion. Analysts estimate the synergies at between $900million and $1.3 billion.
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