InBev pitches buyout to Bud owner's shareholders

InBev CEO Carlos Brito insisted in a statement that his offer of $65 a share was "full and fair" and would give shareholders immediate certainty as stock markets plunge.

The Belgian-based maker of Stella Artois and Beck's has already set the scene for a hostile takeover battle, by saying it would "pursue all available avenues that would allow Anheuser-Busch shareholders a direct vote."

Last week it filed suit in Delaware, seeking a declaration that half of all shareholders could oust the company's 13 board members without cause.

It said it wants to confirm that the five directors elected in 2006 could be removed by shareholders, saying it is clear that the other eight could be pushed out.

The Anheuser-Busch board on Thursday rejected InBev's offer as "financially inadequate," offering instead a plan to boost earnings growth to win shareholder support for staying independent. The St. Louis-based company accounts for about half of the U.S. beer market with brands that include Budweiser, Bud Light and Michelob.

In a transcript of a Friday investor conference filed with the Securities and Exchange Commission, CEO August Busch IV said the board had taken InBev's proposal "very seriously" but it did not reflect the value of the Budweiser brand or other beer industry combinations.

"The value InBev claims to offer in proposing $65 per share assumes cost reduction Anheuser-Busch can achieve independently," he said.

Anheuser-Busch is promising to make $1 billion in savings over the next three years, shaving up to 15 percent of workers from its payroll by encouraging more to take early retirement, cutting other costs and borrowing InBev's zero-overhead plan to justify expenses.

It is also promising to expand Budweiser in China, saying rapid growth there would have an important impact on earnings. Overall cash flow would increase by $350 million next year from 2007, it said.