SABMiller to recommend AB InBev's improved offer

LONDON -- The board of brewer SABMiller on Friday said it intends to recommend shareholders accept Anheuser-Busch InBev's revised $104 billion takeover offer, clearing the way for a shareholder vote on the mega-deal.

The decision comes as some SABMiller shareholders were seeking a better offer after the value of the pound dropped more than 10 percent since Britain voted last month to leave the European Union.

The pound's drop means the majority of SABMiller's shareholders have seen the value of their deal drop when compared with the offer of cash and AB InBev shares that is being offered to SABMiller's top two shareholders.

Those two shareholders -- U.S. tobacco company Altria and investment firm BevCo -- had arranged for that special offer because they wanted to remain invested in the new company.

The pound's drop created a gulf between the values of the two kinds of offers that has drawn protests from smaller investors such as Aberdeen Asset Management, which owns a stake of over 1 percent.

Earlier last week, AB InBev, the maker of Budweiser, increased its cash offer for SABMiller to $59.3 per share to appease those smaller shareholders.

That was not enough for some, who argued Altria and BevCo should not be allowed to vote on whether that new offer is good enough.

The SABMiller board said Friday it intended to propose to a U.K. Court Altria and BevCo be treated as a separate class of shareholders. That means they would not have a right to vote on whether the cash offer is adequate.

Aberdeen welcomed the move.

"This acknowledges the reality of the situation and will help to ensure that the views of the rest of the investor base have due weight," the company said in a statement. "As we have already indicated, we intend to vote against the deal as we are uncomfortable with the structure and believe it undervalues the company. We would welcome other investors who value good corporate governance and recognize the superior value from continuing to hold SABMiller as a standalone entity voting in a similar fashion."

Altria and BevCo, which holds the investments of the Santo Domingo family, together own about 40 percent of SABMiller.

The success of the deal will now depend on the outcome of the shareholders' vote. AB Inbev has said that its latest improved offer was "final." Under U.K. takeover rules, a final offer can't be increased.

Friday's decision by SABMiller to recommend the deal comes only hours after AB InBev swept past the last regulatory hurdle for the deal when Chinese regulators gave the go-ahead for AB InBev to sell SABMiller's stake in China's Snow Breweries.