David Kirkpatrick

July 8, 2008

Hostile takeover strategy? Replace the board!

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 1:27 am

Interesting CFO.com story on the hostile takeover strategy of replacing the board of directors that rebuffed the original effort to buy the company. Looks like this is going on with both Microsoft/Yahoo and InBev/Anheuser-Busch

From the link:

The hostile-acquisition strategy of getting a target’s shareholders to replace a resistant board came into sharp focus with announcements today in two of the biggest bids of the year: InBev’s offer for Anheuser-Busch, and Microsoft’s earlier-withdrawn bid for Yahoo.

In a filing with the Securities and Exchange Commission, Belgian brewer InBev NV asked St. Louis-based Anheuser-Busch Cos. to set a record date for the $46.3-billion InBev solicitation, which Anheuser rejected last month as insufficient. InBev proposed replacing Anheuser CEO August Busch IV, along with other directors, in favor of a board containing Busch’s uncle, Adolphus Busch IV. The uncle, a great-grandson of the company’s founder, is described as supportive of the bid in a Bloomberg News report on the filing. August Busch, of course, is leading the opposition.

Bloomberg also quoted Wim Hoste, a KBC Securities analyst based in Brussels, as saying that it is “getting less likely that InBev will increase its offer.” He called the InBev bid to replace the board as “a way of keeping up pressure,” so that either the current board talks to InBev, of “a renewed board could be more positive.” He also said, however, that the approach “slows down the pace of the takeover project.”

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