DealZone

Ice cold rejection

June 26, 2008

Anheuser-Busch is set to reject InBev‘s $46.3 billion takeover offer, a source tells Reuters. After a few weeks of stonewalling by the company and posturing by Missouri politicians, is that really such a surprise? The company’s defensive strategy will hinge on restructuring¬† the workforce and spinning off non-core assets like the SeaWorld theme parks, but as DealZone’s David Jones notes, those same strategies have alreclydesdales.jpgady been offered up by InBev as a justification for its bid. Might as well crack open a few icy cold Budweisers — looks like this is going to take a while to sort out.

Fortis shareholders might also be in need of a Stella six-pack, as the Belgian-Dutch financial services group announced plans to shore up its finances with measures worth more than 8 billion euros ($12.54 billion), including issuing new shares, hitting its stock on dilution worries. Fortis will issue 1.5 billion euros in new shares plus up to 2 billion euros of non-dilutive preference shares, save 1.3 billion euros by not paying an interim 2008 dividend, and will also sell non-core assets and sell and lease back real estate. “We believe that 2008 will be a difficult year for our industry and we do not expect an improvement in the economic environment soon,” said CEO Jean-Paul Votron. “The measures announced today will help Fortis navigate through the current challenging market circumstances.”

Goldman analyst William Tanona has pulled a page from the Meredith Whitney playbook, questioning the viability of the Citibank‘s dividend, predicting $8.9 billion in second-quarter writedowns, and adding its stock to the “conviction sell” list. He also said that the bank may have to issue common stock or sell assets to raise capital because regulators may forbid it from issuing more preferred or convertible securities. Citi shares were down 3.7 percent in pre-open trading.

Other deals of the day:

* BT Group is to acquire German IT services specialists Stemmer GmbH and SND GmbH.

* Swedish telecom operator Tele2 divests Tele2 luxembourg and Tele2 liechtenstein to Belgian telecom operator Belgacom for approximately SEK 2 billion.

* World number one bearings maker SKF said it had signed a deal to buy U.S.-based Peer Bearing Co for an undisclosed sum.

* Oriola-KD Oyj said it has increased its holding in Kronans Droghandel, based in Sweden from 85.62 percent to 98.13 percent.

¬†* Singapore’s United Overseas Bank said it will pay 780 million yuan ($114 million) for a 15.38 percent stake in China’s Evergrowing Bank.

* German chemical maker Lanxess said it planned to acquire two inorganic pigments production facilities from a previous Chinese partner, marking its first acquisition in China. 

* Tyson Foods said it is selling its Canadian beef operation to XL Foods, a Canadian-owned beef processing company, for C$107 million.

* Russian metals giant OAO Severstal agreed to acquire U.S. steel company Esmark after increasing its previous offer, which had been rejected, the companies said.

* Hedge fund SAC Capital reported that it owns a 5.3 percent stake in the common stock of Take-Two Interactive Software, publisher of the blockbuster ‘Grand Theft Auto’ video game.

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