Update: CNBC Says ABI Not Seeking Financing


Dear Client:

David Faber, a deal commentator at CNBC, said on the program minutes ago that there is no financing being arranged by ABI. Earlier this morning the WSJ reported that ABI was lining up banks to finance a huge $122 billion takeover bid of SABMiller.

"According to my sources, that is not true," he said. "There is no talks with banks at this point by AB InBev trying to put forth financing for SABMiller ..... there are not talks about financing whatsoever, and there are no talks between AB and SABMiller."

SABMiller shares and Molson Coors shares are up today on the news, presumably as folks take the possibility of an ABI takeover of SABMiller to mean that Molson Coors will benefit from getting a sweet deal on their stake in MillerCoors, as ABI would most certainly have to shed their stake in MillerCoors to comply with antitrust authorities. Molson Coors has first right of refusal certainly. But it's not a foregone conclusion that Molson Coors would end up with the entire company: Constellation or Heineken would also be a good match to buy out SABMiller's stake, and think of the powerful portfolio MillerCoors would end up with? Just something to think about.

The ABI financing story has been out there since June, so technically the WSJ story this morning isn't really new news. So stay calm and carry on for now.

However, the mere fact that SABMiller was pitching a deal to Heineken likely means that they believe ABI is on the hunt. I think SABMiller brass knew that Heineken would likely say no, but it sends a strong signal to ABI that they are not going to go down without a fight.

This hail mary pass to Heineken sure does seem similar to A-B's efforts to acquire Grupo Modelo just as InBev made their bid for A-B. History repeats itself, but will it go down the same way?

Until tomorrow, Harry

"One should always be in love. That's the reason one should never marry."
-Oscar Wilde

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