The rejection of the £42.15 per SABMiller share either opens the door for a higher offer, or the possibility of a hostile takeover attempt by the world's largest brewer.
"The (SABMiller) board, excluding the directors nominated by Altria Group Inc, has unanimously rejected the £42.15 (about R864) proposal as it still very substantially undervalues SABMiller, its unique and unmatched footprint, and its standalone prospects," said SABMiller in a statement hours after AB InBev's own media briefing in which it publicly tabled its proposal for the merger.
A deal at that price would value SABMiller at £71.7bn, or just under R1.5-trillion.
The Leuven, Belgium-based AB InBev said earlier that it went public with its proposal after it failed to have a meaningful engagement with the board of the London-based SABMiller.
AB InBev CE Carlos Brito said the company had met SABMiller representatives twice in the past few weeks and tabled two offers. Both were rejected without being presented to SABMiller's investors.
"We thought SABMiller shareholders should know what is being discussed. AB InBev is disappointed that the board of SABMiller has rejected both of these prior approaches without any meaningful engagement," said Brito.
The proposal was a precursor to a formal and binding offer that AB InBev has until next Wednesday to present to SABMiller. This is in line with company laws governing the UK, where SABMiller is headquartered and where it has a listing on the London Stock Exchange.
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