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ST. LOUIS -- In an effort it said will increase shareholder value, Anheuser-Busch (A-B) Chief Marketing Officer Dave Peacock announced the St. Louis-based brewer will raise prices to 85 percent of its beer volume in September and October as part of a new strategy, the St. Louis Business Journal reported.
The goal is to increase A-B's profits by 8 percent over the next five years, which is in comparison to the company's recent earnings falling between 3 and 5 percent. Peacock explained that the company is projecting earnings of $3.90 a share, a 25 percent increase with continued double-digit earnings-per-share growth through 2012.
In related news, Belgium-based InBev announced it will file preliminary consent solicitation statement with the United States Securities and Exchange Commission with the intent of removing each member of the board of directors of A-B. The company believes this will provide shareholders with an opportunity to have a direct voice in the proposed combination with A-B.
While the proposed deal for a friendly combination of the two companies was put forth officially on June 11, A-B has been slow to respond which spurred InBev's Chief Executive Officer Carlos Brito to write three letters to A-B, the latest stated:
"Our strong preference remains to enter into a constructive dialogue with Anheuser-Busch to achieve a friendly combination that comprehensively addresses the interests of all constituents. We believe our firm offer of $65 per share reflects the full and fair value of Anheuser-Busch and is a compelling proposal for shareholders. The proposal is backed by fully committed financing and provides immediate certainty of value in a weakened stock market environment."
A-B released a statement yesterday calling InBev's latest move a "self serving" attempt to seek the replacement of existing board of directors with InBev's hand-picked nominees. The company also stated that it deemed InBev's offer financially inadequate and not in the best interest of shareholders.
Since A-B has not entered into dialogue over this issue, InBev has set its sights on a legal course of action which also included filing suit in Delaware to confirm that A-B shareholders have the ability under Delaware law to remove without cause all 13 members of the A-B board.
According to a released statement, InBev will submit a request to the A-B board to set a record date for the consent solicitation. A-B is required to respond within 10 days of this request with a record date. For InBev's proposals in the consent solicitation to become effective, proper written consent of the majority of A-B shareholders is required within the timeframe.