Friday, June 27, 2008

Budweiser says no to Inbev

Anheuser-Busch has once again turned down Inbev's offer. Way to go Budweiser. Inbev has now decided to go hostile and try to take over. Inbev has filed a lawsuit in Delaware Chancery Court seeking to empower Anheuser shareholders to ax it's entire board. Looks like Inbev has thrown the first punch to start a fight against Budweiser or shall I dare say in America's face. This could end up backfiring on Inbev. Budweiser is a part of America that you can't just take away. Inbev is now turning it's attention on the shareholders to see if greed will overpower their belief in Budweiser and America. Hostile deals can be bad, because the buyer risks alienating the employees and the company can become difficult to integrate. Inbev might get Budweiser and win the battle but they may lose the war because they could lose the people. It's one thing to mess with a company but it's a whole new ballgame when you mess with a company that is part of a great nation. Inbev don't realize the can of worms they have opened by trying a hostile takeover of Budweiser both politically and patriotic. This slap in the face by Inbev should strengthen the resistance and harden the spine of Budweiser and all it's allies. Even some lawmakers and both senators from Missouri have already expressed objections to this deal. Now let's all remember Warren Buffet backs in Inbev not Budweiser. Shows you how much he loves America he just loves the money. Inbev is likely making plans to convince the shareholders to dump Budweiser's 13 directors and nominate it's own slate of directors that will support Inbev. Budweiser's shareholder base has likely changed since Inbev made its offer and is now populated with merger arbitrageurs who could be receptive to InBev's plans. Inbev has to get written consent from the shareholders in order to replace the board. They are also asking the Delaware court if it's even possible to remove all 13. Personally Budweiser is made in Missouri born in Missouri. Inbev should have to try and convince a court in Missouri. I'm sure that would not go well for Inbev. Either way looks like Inbev might have bit off more then they can chew, I think they are in for a real battle. Unless a bunch of Warren Buffetts own the shares now.

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