Quite why anyone should want to seek global domination of the alcoholic fizzy drinks market is a question whose answer is obvious only to the army of bankers, lawyers and PR consultants who stand to gain life-changing sums if AB Inbev manages to spend £65bn buying SABMiller. This week the awful prospect looms that their dream of riches could all fall apart.

The tension is being cranked up by the Takeover Panel’s “put up or shut up” rule which imposes a deadline on “indicative” bids. Kraft’s siege of Cadbury had stretched the (then) existing bid timetable to its limit, wrecking Cadbury’s share register and delivering the company to the bidder at what quickly proved to be a bargain price. The takeover rules, crafted over the years to balance the interests of bidder and target, were deemed to have failed to hold that balance.

The result was new, improved PUSU, and for Inbev that’s Wednesday, the regulation 28 days after the clock started. The whole affair has been a whirlwind. Aside from the two big block holders in SAB, shareholders have barely had time to think, let alone to decide whether their board is really putting their interests first. It’s widely assumed that the Panel will grant an extension if necessary, but it can do so only if the target company consents, and so far SAB’s board isn’t playing.

Failure to ask for more time before 5pm on Wednesday would force InBev to go hostile or go away. Since the proposed offer is worth £42.15 a share, compared to under £30 before the bid news leaked, this is about as high-stakes a poker game as we’ll ever see. A hostile bid would generate bad blood across the world, so with SAB shares at around £36.80, almost exactly halfway between the two prices, there’s a value swing of nearly £10bn each way hanging on the outcome.

The parasite army of fee-gatherers can only hope that InBev grits its corporate teeth and raises the proposed offer before Wednesday, causing the SAB board to see that while £42.15 is derisory, £43 (say) is a jolly fine price. Even so, it’s clear that the existing PUSU rule has pushed the battle advantage dramatically towards the defence. Bids should be decided after calm consideration, and communication with the target’s shareholders. This one won’t be.

 

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