SABMiller share price: Heineken rejects takeover bid

By: Farquar McIntosh
Farquar McIntosh
Farquar McIntosh began his career in metals trading, working for an established operator before going freelance as he still… read more.
on Sep 15, 2014
Updated: Oct 21, 2019, Monday, September 15: Heineken NV has rebuffed a takeover bid by larger rival SABMiller Plc (LON:SAB) after its majority shareholder said it intended to preserve the firm as “an independent company”.

The Dutch brewing giant yesterday confirmed media reports that it had been approach by SABMiller, but deemed the offer “non-actionable”.
Earlier on Sunday, Bloomberg reported of SABMiller’s approach, saying that it was part of the company’s strategy to protect itself from a potential takeover bid by the world’s largest brewer Anheuser-Busch InBev.

In today’s trading SABMiller was up five percent at 3,574.50p as of 08:39 BST. The company’s stock has gained 15.4 percent since the start of the year.
**Warming to deals**
“In response to recent press speculation Heineken NV announced today that it has been approached by SABMiller plc regarding a potential acquisition of Heineken. Heineken has consulted with its majority shareholder and concluded that SABMiller’s proposal is non-actionable,” Heineken wrote in a brief statement on its website.

The Dutch firm, which is the world’s third-largest brewer by volume after Anheuser-Busch InBev and SABMiller, is controlled by the Heineken family, which owns just over 50 percent. According to unnamed sources cited in Bloomberg’s report, SABMiller’s offer would have made the Heineken family one of the largest shareholders in the combined group. However, the founding family of the Dutch firm seems confident about the business’ future as an independent company.

“The Heineken family and Heineken N.V.’s management are confident that the Company will continue to deliver growth and shareholder value,” the statement said.
It’s unclear whether SABMiller’s management will make another attempt to acquire Heineken, but the initial approach alone suggests a reversal in Alan Clark’s view on acquisitions from a year ago, when SABMiller’s chief executive said that deals were less important than growing the brands it already owns.

However, it seems that, in light of recent speculation regarding an AB InBev takeover bid, Clark may have become more open to making a strategic acquisition.
Bloomberg quoted Matthew Beesley, portfolio manager and head of global equities for Henderson Global Investors, as observing: “For SAB, a way of preserving their independence is to buy Heineken.” He added: “It’s easy to underestimate the desire for management teams to be in control of their own destiny rather than to sell their business at a very high price.”
**Analysts on SABMiller**
According to the Financial Times, as of September 12, 2014, the consensus forecast amongst 62 polled investment analysts covering SABMiller suggests investors should hold their position in the company. The same consensus estimate has been maintained since the sentiment of investment analysts deteriorated on April 18, 2014, the FT notes.
**As of 11:16 BST buy SABMiller shares at 3,544.00p**
**As of 11:16 BST sell SABMiller shares at 3,542.00p**

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