SABMiller share price gives up some of yesterday’s gains

By: Michael Kamberov
Michael Kamberov
Kamberov joined us to improve his ability to report the financial markets and learn about business. He now heads… read more.
on Jun 11, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Wednesday, June 11: SABMiller’s (LON: SAB) share price is down over two percent today following a sudden spike yesterday, when the brewer climbed to the top of the FTSE 100 leaderboard, closing 5.57 percent higher at 3.460.00p.

SABMiller added the most points to the FTSE 100 yesterday although the index ended flat at 6,873.55. The increased interest in the beverage stock was due to speculation about a potential takeover by Anheuser-Busch InBev.
**Expectations**
In an interview with the Financial Times last week, SABMiller CEO Alan Clark said that the company’s current goal is to significantly increase its share of the US premium beer market. (SABMiller share price: Company seeks to boost market share in US premium beer) On Monday the FT cited analysts at Santander as reporting “growing market chatter” about the possibility of a merger between SABMiller and AB InBev. Santander expects a potential offer from Anheuser-Busch to be at around a 40 percent premium, giving the world’s second largest brewing company an enterprise value of $140 billion (£83.4bn)

The Belgian-Brazilian drinks giant has been rumored to be interested in SABMiller for over a decade. However, AB InBev’s partnership with PepsiCo which runs until 2017, is a potential sticking point, given SABMiller’s strong relationship with Coca-Cola.

**Last year’s results**
On May 22, SABMiller released its financial report for the year ended March 31. The statement showed a decline in Europe but the results of the brewer were lifted by significant growth in developing markets. (SABMiller share price: Results bolstered by developing markets) SABMiller has shown continuous progress over the last five years and now aims at maintaining its success in developing markets and increasing its influence in the US market.

Despite yesterday’s share price surge, some analysts remain ambivalent about the potential for further gains. Michael Hewson of CMC Markets told Reuters that investors are generally hesitant about purchasing equities at the moment given their slightly higher valuations. “Companies have got a lot of money and are looking at places to spend. SABMiller is just as likely a candidate as anyone else. I think it’s more chatter than substance at this moment,” he added.
**As of 12:16 BST buy SABMiller shares at 3384.00p**
**As of 12:16 BST Sell SABMiller shares at 3383.00p**

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