AB InBev's CEO Brito Runs Afoul of U.K. Takeover Rules
October 09 2015 - 3:08PM
Dow Jones News
By Shayndi Raice
LONDON--The U.K. takeover rules are tripping up yet another
foreign company in the heat of battle.
On Wednesday, Carlos Brito, the chief executive of
Anheuser-Busch InBev NV, ran afoul of the U.K. Takeover Code by
saying that he expected to have the support of SABMiller PLC's
second-largest shareholder. AB InBev, which is pursuing a nearly
$100 billion deal to buy its biggest rival, put out a statement
clarifying that it didn't currently have the support of BevCo Ltd.,
the investment vehicle run by the Santo Domingo family that owns
14% of SABMiller.
Mr. Brito isn't alone in such a misstep. Mergers and
acquisitions in the U.K. are governed by an independent body known
as the Takeover Panel, whose rule book can be hard for foreigners
to navigate.
Last year, U.S. drug maker AbbVie Inc. put out a clarification
statement after its chief executive said in a newspaper interview
that shareholders were generally supportive of its bid for
U.K.-listed, Dublin-based rival Shire PLC.
Lawyers say U.S. companies often underestimate the weight the
panel gives to all public communications. One of the panel's
primary missions is to ensure that all shareholders receive
accurate information and have equal access to such information.
"The way the panel looks at that issue, and indeed all public
statements, is from a market perspective," said Selina Sagayam, a
London-based partner with the law firm Gibson Dunn & Crutcher
LLP. "Has the market been misled?"
In both cases, AbbVie and AB InBev implied without explicit
proof that they had shareholder support for their proposals,
potentially causing confusion to the market.
Because of its sensitivity to misinformation moving markets, the
panel requires bidders to uphold any public statements they make.
For example, when U.S. pharmaceutical giant Pfizer Inc. went after
U.K. rival AstraZeneca PLC, it said nearly a week before a bidding
deadline that it was submitting its final offer. By calling it a
final offer, Pfizer was blocking the possibility of later raising
its bid. Similarly, what was then Kraft Foods Inc. got into hot
water when it closed a Cadbury PLC plant it had said during its
takeover bid would remain open.
Pfizer didn't immediately respond to a request for comment.
For the panel, a statement to the market means "the toothpaste
is out of the tube," Ms. Sagayam said. The panel will hold bidders
to account because "there were investors or shareholders who made
an investment decision based on those statements."
Write to Shayndi Raice at shayndi.raice@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 09, 2015 14:53 ET (18:53 GMT)
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