Anheuser-Busch (BUD) may finally be admitting that it cannot get its shares up from $50 to the InBev bid of $65, even it its cuts costs and sells assets. BUD shares have sold at the lower price for too long. The beer business is not that good.
Now, it appears that InBev will raise its price. The BUD board can save face and shareholders can get a good deal for once.
According to The New York Times, "Exact terms of the potential deal could not be learned, but one person said that InBev had indicated that it would be willing to pay more than the $65 a share it had originally offered."
Perhaps it is finally dawning on public company boards that offers well in excess of current market value are hard to beat, especially in a bad economy. The Rohm and Hass (ROH) board clearly decided that a bid from Dow Chemical (DOW) was too good to be true. On the other hand, the board at Yahoo! (YHOO) has not learned that lesson. It has cost shareholders about a third of the value of the company’s shares.
BUD’s board looks like it is about to give in.
Good move.
Douglas A. McIntyre
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