InBev turns to Busch shareholders

Company urges board's ouster after rejection

ATLANTA - InBev NV will ask Anheuser-Busch Cos. shareholders to oust the US brewer's board after the directors rejected InBev's $46.3 billion hostile takeover offer because it was too low.

InBev is seeking to use a process outlined in Anheuser-Busch's bylaws that allows shareholders to vote on a new board without a meeting, the Leuven, Belgium, brewer said yesterday in a US regulatory filing. Anheuser-Busch called InBev's maneuver "self-serving" and said it will ask shareholders to ignore it.

Anheuser-Busch, the maker of the 132-year-old Budweiser beer, rejected InBev's offer of $65 a share on June 26, saying it undervalued the company. The Belgian brewer wants to replace chief executive August A. Busch IV and other directors with a board that includes Adolphus A. Busch IV, the chief executive's uncle and great-grandson of Anheuser-Busch's founder, who has urged acceptance of the bid.

"It's getting less likely that InBev will increase its offer," said Wim Hoste, an analyst at KBC Securities in Brussels with an "accumulate" rating on the Belgian company. "This is a way of keeping up pressure. The board of Anheuser-Busch in its current form will start to talk to InBev in a more friendly way, or a renewed board could be more positive."

The directors may be replaced with the permission of holders representing more than half the shares outstanding, InBev said.

The brewer will wait for the Securities and Exchange Commission to review its proposal before asking shareholders to vote, said InBev outside spokeswoman Nina Devlin of Brunswick Group LLC.

Anheuser-Busch said in a statement yesterday that InBev's offer is still too low and that it told the Belgian brewer that it would be "open" to considering a higher bid.

The attempt to replace Anheuser-Busch directors with "InBev's hand-picked nominees is a self-serving effort by InBev to try to purchase Anheuser-Busch for a price Anheuser-Busch's independent board already has determined to be financially inadequate," the brewer said.

Anheuser-Busch said it, too, will mail ballots to shareholders asking them to vote to retain the current directors.

The conflict moved Barack Obama, the presumptive Democratic candidate for US president, to speak against the proposed InBev takeover during a campaign appearance in St. Louis.

"I do think that it'd be shame if Bud is foreign-owned," Obama said. "We should be able to find an American company that is interested in purchasing Anheuser-Busch if in fact Anheuser-Busch feels that it's necessary to sell."

In its statement, Anheuser-Busch said an InBev subsidiary has a "significant partnership" with Cuba's government to make and distribute products in the Caribbean country. Anheuser-Busch said InBev hasn't said how the arrangement with Cuba would affect the US brewer's customer relationships or ability to get approval for the deal from US regulators.

InBev spokeswoman Devlin didn't have an immediate response when contacted for comment on the statement.

Anheuser-Busch rose 7 cents to $61.74 in New York Stock Exchange composite trading. InBev rose 0.7 percent in Brussels.