In the end, Jan du Plessis folded in the predictable style of most big company chairmen. The board he leads at SABMiller has rolled over and said it will accept Anheuser-Busch In Bev’s £44-a-share offer, a price about £2 short of an honourable surrender.
So much for the idea that last week’s offer of £42.15 was a “very substantial undervaluation”. Du Plessis’s words were tactical bluster. A bump of a mere 4.4% will pave the way for the monopolistic Megabrew to come into being, enough to make self-respecting drinkers turn to something stronger than a bottle of the bidder’s bland Budweiser.
It is possible, of course, to sympathise with the position du Plessis found himself in. His 27% shareholder, the Marlboro cigarette firm Altria, was lobbying for the deal to happen from the off and liked AB InBev’s tax-friendly share alternative. The San Domingo family from Colombia stayed loyal but its 14% stake was an inadequate counterweight to Altria’s influence.
Many of the floating voters in the middle – unsentimental City fund managers with an eye on their end-of-year performance statistics – want a deal to happen. They, like everyone else, can see that currencies, especially the South African rand, have moved against SAB. Sadly, they will regard £44, plus a dividend that could be worth 80p a share, as a tidy outcome. And a $3bn (£2bn) break-fee, to be paid if AB InBev tries to walk away before completion, is undoubtedly chunky.
Here, though, we take an old-fashioned view of a chairman’s responsibilities. Big shareholders’ views have to be respected, but a chairman is not there to be an echo. Du Plessis could have offered his own opinion on the wisdom of a deal that offers nothing for SAB’s employees, customers and suppliers. He could have forced AB InBev to come clean on the full extent of its cost-cutting ambitions. And even if Altria was a lost cause, he could have appealed for greater loyalty from long-term shareholders who have done superbly over the years by owning SAB stock.
Instead, du Plessis and co have bowed before a short-term takeover premium that is not as pretty as its 50% headline suggests (it is more like 33% if you take the three-month average of SAB’s share price before AB InBev made its first move). The board has done what the City expected, in other words. No wonder Tuesday’s announcement from SAB didn’t even bother to try to argue that a takeover is good for staff or customers. The short answer is that it’s not.