Anheuser investors say $65/share would be fair bid

By Muralikumar Anantharaman

BOSTON (Reuters) - A bid by Belgium's InBev NV INTB.BR for Anheuser-Busch Cos BUD.N at $65 a share would be reasonable, and a takeover would boost the Budweiser beer maker's sluggish growth, Anheuser shareholders told Reuters.

InBev, the world's second-biggest brewer, is weighing a bid for Anheuser, the No. 1 U.S. brewer, and sources familiar with the situation told Reuters this week that Anheuser has hired financial advisers in anticipation of a bid.

The companies have not commented, but media reports say InBev has been trying to arrange a $50 billion funding package from banks and was considering an offer of $65 a share.

"I don't think $65 is a bad price because if the company stayed the way it is now, it certainly would be, on average, two years before the stock reaches that level on a sustained basis," said Stephen Jarislowsky, chairman and CEO of Canada's Jarislowsky, Fraser Ltd, which owned 1.7 million Anheuser shares as of March 31.

Anheuser shares rose as much as 11.4 percent after the news of a likely InBev bid first emerged in May, to an all-time high of $58.56 on June 2. They have retreated slightly from that level and traded at $57.65 Thursday morning.

A $65-a-share bid would constitute roughly a 24 percent premium to the price of the shares before news of a potential bid emerged. The shares have been stagnant for the past five years.

A portfolio manager of a San Francisco-based fund company, which owned 1.6 million Anheuser shares as of end-March, said the firm was receptive to an InBev bid.

"Part of the reason we own the stock is the belief that the company could be run a lot better than it has been," said the manager, who did not wish to be identified. "On the price, it really does depend on the synergies and opportunities seen. But $65, given the information that we have, does not seem to be an unreasonable price."

InBev, formed from the 2004 merger of Belgium's Interbrew with Brazil's AmBev, has just a marginal presence in the United States but a mature business in Western Europe.

'RIGHT CULTURE'

The brewer of Stella Artois, Beck's and Brahma is also present in growth markets in Eastern Europe, Asia and Latin America, notably in the key market of Brazil.

InBev's overseas clout is a key reason for investors to view favorably any bid for Anheuser, which faces a mature U.S. market and competition from foreign beers and wine. To diversify, Anheuser bought 50 percent of Mexico's Grupo Modelo (GMODELOC.MX) and 27 percent of China's Tsingtao Brewery Co Ltd (600600.SS).

"A takeover would expand the globalization of their franchise, and we like that," said Duncan Richardson, chief equity investment officer at Eaton Vance, the 10th biggest Anheuser shareholder with 5.5 million shares as of March 31.

Richardson declined to comment on the price of a potential offer but said Eaton Vance was open to a bid for Anheuser. "Part of the investment case was that there could be a takeover," he said.

A takeover by InBev would not only help Anheuser add marketing leverage and distribution strength, but also change the culture there, some shareholders said.