Investors Snub £68bn Bid For Grolsch Owner

Two of the leading shareholders in SABMiller, the owner of Grolsch and Peroni, are urging its board to stand firm against a £68bn takeover bid from the US-based brewer of Budweiser.

Sky News understands that the Public Investment Corp of South Africa, which holds roughly 3% of SABMiller's shares, is opposing a 4,215p-a-share cash proposal from AB InBev.

The fund's position is significant, and emerged on the same day that Aberdeen Asset Management, another top ten shareholder in SABMiller, announced that it was also supportive of the board's decision to reject AB InBev's bid.

"Aberdeen supports the Board of SABMiller in its decision to reject a deal at the proposed price of £42.15.

"While we can see the potential benefits of a merger between the two companies we believe the public offer from AB Inbev significantly undervalues SABMiller and its long-term potential," the fund manager said in a statement.

"Shareholders considering the current offer should keep in mind a number of attributes that make this company a unique asset: the quality of its brands and operations; its scale and dominant position in each of its major markets; the enormous growth potential of its African business in particular; and its best-in-class management team."

The emergence of the two investors' views comes five days ahead of a deadline for AB InBev to announce a firm offer for its London-listed rival or abandon its interest for at least six months.

SABMiller could request an extension to that deadline from the UK's Takeover Panel, although the current level of friction between the two sides reduces the likelihood of that happening.

Altria, which is by far the largest shareholder in SABMiller, has taken the opposing stance to PIC and Aberdeen, arguing that the 4215p-a-share cash offer is attractive.

For tax purposes, Altria and BevCo - a vehicle of the Colombian Santo Domingo family - would have the option of receiving some of the proceeds in AB InBev shares.

BevCo has so far declined to comment publicly on its stance.

In a statement issued earlier on Friday, SABMiller announced a revised cost savings target from US$500m by 31 March 2018 to at least US$1.05nn by 31 March 2020.

Alan Clark, Chief Executive of SABMiller, said

"Our recent trading statement highlighted our accelerating growth in the second quarter.

"Another key plank of our strategy is to build a globally integrated organisation to optimise resource, win in market and reduce costs. The measures we are announcing today are a continuation of our existing cost saving programme.

"Whilst we are already a highly efficient business with strong EBITDA margins of 38% across our 20 largest managed beer markets, we are continuing to remove duplication across markets, bringing specialist expertise in areas like procurement under one roof, and standardising common processes.”

SABMiller's shares closed slightly higher on Friday at 3668.5p, valuing the brewing giant at nearly £59bn.