Time running out for investors to trade in SABMiller on JSE

Picture: Russell Roberts

SABMiller — founded in 1895 and listed in 1897 — will disappear from the board in early October, if SABMiller and Anheuser-Busch InBev (AB InBev) shareholders approve the merger of the two beer giants.

All will not be lost to South African investors. The 50% or so of SABMiller’s operations that have not been sold off in a bid to secure regulatory approval, will be absorbed by AB InBev and accessible through that company’s secondary listing on the JSE. The listing of the combined entity will commence on October 11.

Last week company sources said SABMiller shareholders could expect to receive payment for their shares in late October.

Before the shareholders vote on the transaction on September 28, a UK court will determine whether there are two sets of shareholders requiring two different votes.

Last week when it announced it was recommending the AB InBev offer, the SABMiller board said it would ask the UK court to treat its two major shareholders Altria and Bevco as a separate class of shareholders. If the court agrees, the two shareholders, who have a combined 41% of the company and have accepted a Partial Share Alternative (PSA), will not be allowed to vote on the £45 a share cash offer.

In UK law, Bevco and Altria could be deemed to be conflicted shareholders because of the PSA, which was designed specifically for them. In a recent note to clients Institutional Shareholder Services queried whether all SABMiller shareholders could realistically choose between the PSA and the all-cash offer. "If the option between cash and PSA was a real one, then the shares in the PSA would have been unrestricted, listed ones."

The possibility of a separate vote was flagged by the merging parties in the offer documents released in November 2015.

The UK court will hear the matter on August 22.

Both SABMiller and AB InBev will hold their shareholders’ meetings on September 28. If shareholders in both firms approve the transaction, the deal will be completed on October 10. This is just short of one year after the transaction was first formally announced and comfortably within "the second half of 2016" closing date that AB InBev CEO Carlos Brito had initially set.

Within that time the merging parties engaged with more than 20 regulators, and planned the disposal of more than 50% of SABMiller’s beer volumes.