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  1.  
    • CommentAuthordchanko
    • CommentTimeOct 10th 2008
     Report Post# 1
    Perhaps some of the more wise and experienced individuals on this site can explain this one for me.

    nBev (INB.BT) is to acquire Anheuser-Busch Cos. (BUD) for $70.00 per share.

    yet BUD now stands at USD$58.50, which is approx 17% off the agreed sale price.. is this one of those often touted no brainers

    or Is this a reflection of the perceived risk that the agreement wont go ahead? Or is there some voodoo in the Arbitrage Spreads world that justifies this difference.
    • CommentAuthorasafp
    • CommentTimeOct 10th 2008
     Report Post# 2
    Stock value, like beauty, is in the eye of the beerholder.
  4.  Report Post# 3
    I've been asking similar questions about the Cleveland Cliffs offer to buy Alpha Natural Resources (ANR) for $125 a share (with ANR presently trading at $31 and change). Within the past 60 days ANR was trading over $100. See my ANR thread where I said to sell ANR at $92 in late August.

    I've been doing some reading and there are separate and unrelated issues concerning the impact of hedge funds on corporate management, but one point that caught my eye is that if the deal fails (and it looks like it may) Cleveland Cliffs must pay ANR $100 million to break it off.
    • CommentAuthordchanko
    • CommentTimeOct 11th 2008
     Report Post# 4
    Rough calculations on the back of a BUD beer mat -If the Cleveland Cliffs and ANR deal does fail and assuming $100 million goes directly to shareholders ( fat chance) , would double the expected earnings - pity ANR does not pay a Div... but could give a nice bounce to stock price -shame the chart is so horrible

    Another one in this category is DNA - now on sale at $73 dollars only - with Roche offering $89 - I am pretty close to this one during my 9 to 5, this one looks like it will go ahead
  6.  Report Post# 5
    Yes, the $100 million will go to the lawyers and brokers that put the deal together.

    What's the timetable for the DNA deal?
    • CommentAuthorcandsrr
    • CommentTimeOct 11th 2008
     Report Post# 6
    Free hot dogs too?

    Kohlberg is supposed to take out Centerplate (CVP) at $4.00. CVP closed at 2.14 on Friday.

    Add it to the (long) list of things that don't make any sense.
    • CommentAuthorperfectsim
    • CommentTimeOct 11th 2008
     Report Post# 7
    I'd like some info on the Bud price myself. Is it just redemptions pushing the stock down or is there something else to be concerned about?
    • CommentAuthordestry
    • CommentTimeOct 11th 2008
     Report Post# 8
    I've found that buyout offers generally see the takeover targets price rising to within 10% or so of the
    value of the offer. That's about the minimum spread a trader will fool with. Of course,
    like all generalities...It's only a general rule of thumb.................Generally.
    • CommentAuthordchanko
    • CommentTimeOct 20th 2008
     Report Post# 9
    Some more info on some of these for what its worth- I still think BUD and InBev make a pretty couple .... perhaps a case of the beer goggles on my part

    http://www.reuters.com/article/mergersNews/idUSN2052511420081020
    Thankful People: farley 5
    • CommentAuthordchanko
    • CommentTimeOct 22nd 2008
     Report Post# 10
    IN the land of takeovers and the like.. IMHO the indicators are still pointing positive to the BUD INBEV deal happening.. pulled this one from Fitch Oct 22nd

    " InBev N.V./S.A. is acquiring BUD for $52.2 billion, or a multiple of 11.5 times (x) BUD's trailing 12 months EBITDA plus trailing 12 months equity income. With the completion of the acquisition , expected by year-end 2008, BUD's operations will be combined with InBev's. To complete the financing for the acquisition, InBev has obtained a $45 billion debt facility and a $9.8 billion equity bridge facility.

    InBev announced on Oct. 14, 2008 that, as a consequence of unprecedented volatility in the global capital markets, particularly during the last week, it has postponed its previously announced rights offering until market conditions stabilize. The Board of Directors will continue to monitor market conditions to determine the appropriate time to launch the rights offering. Ultimately, Fitch does expect InBev to raise the required equity.

    The equity bridge facility has a post-closing maturity of six months, within which period InBev may tap the equity markets at any time. The controlling shareholder of InBev is Stichting InBev, a foundation organized under the laws of the Netherlands, which represents an important part of the interests of the Belgian founding families of InBev (mainly represented by EPS) and the interests of the Brazilian families, previously shareholders of AmBev(represented by BRC). Stichting InBev owns approximately 60.8% of InBev's shares. The entity has confirmed its intention to subscribe for EUR 1.2 billion of new funds when the rights offering proceeds. "


    At a discount of almost $10 per share, will start to dip my toe in at these levels , ... a cover with a Jan 2009 put ( should the deal fall apart) should mitigate some of the risk
    .... but as with all DYODD

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