KEY POINTS:
Investor Warren Buffett is this week expected to step into the US$46 billion ($60.90 billion) hostile bid by Belgian brewer Inbev for Anheuser-Busch, the maker of Budweiser beer.
Sources say Buffett, who owns 5 per cent of Anheuser through his group, Berkshire Hathaway, plans to speak to August
Busch IV, the Anheuser chief executive, within the next few days to discuss the hostile bid.
Buffett, known as the Sage of Omaha and the world's richest man, wants to remain neutral in the early days of the controversial offer, but it is understood Busch wants to know his opinion of the bid.
At the offer price, Buffett's stake is worth some US$2.3 billion.
Sources said Buffett believed the Busch family, which founded the company in 1852, should not reject the bid out of hand and should consider discussions with InBev.
It is understood that Buffett is concerned about Busch's suggestion in a recent statement that it could be "several months" before the company reaches a decision about the Inbev bid, "due to necessary corporate governance, legal and regulatory steps that must be followed".
Buffett's anticipated involvement follows concerns a straight rejection of InBev's offer - made at US$65 a share last Wednesday - might spark investor lawsuits against Anheuser's executive board for breach of fiduciary duty.
The US$65 offer is far higher than the price at which the company's shares have traded at any point in the past decade.
Indeed, the bid was launched at a price 18 per cent higher than Anheuser's previous record, reached in October 2002.
It is also understood the Anheuser boardroom, as well as the founding Busch family, are divided on whether to accept or reject the offer.
Speculation has mounted in recent days that InBev may seek to sweeten its offer by as much as US$4 billion to force a quick acceptance by the Anheuser board but, given that the first offer has not officially been rejected by the Americans, it remains to be seen whether the Belgians will be so hasty.
August Busch, meanwhile, has sought talks with Grupo Modelo, the Mexican brewer that is 50 per cent owned by Anheuser, in an attempt to forge a merger to fend off InBev.
But Grupo Modelo is tightly controlled by a trust belonging to the founding Fernandez family, headed by its 90-year-old patriarch Antonino.
If he does not want to do a deal with Anheuser, the deal will not happen.
Nationalistic opposition to a takeover of Anheuser by a foreign company has gained little traction in financial circles in the past week.
- OBSERVER
