InBev Seeks Bids Mid-July For CEE Operations After CVC Offer-Sources
June 23 2009 - 10:47AM
Dow Jones News
Anheuser-Busch InBev (ABI.BT) is seeking binding bids by
mid-July for its Central and Eastern European operations, after CVC
Capital Management sent the brewer an unsolicited approach for the
businesses, people familiar with the situation said Tuesday.
The London-based buyout shop approached the brewing giant with
an offer triggering an auction process to get what the company
hopes is a "fair" and "best" price, people said.
Other sponsors interested in the assets include U.S. private
equity firms Kohlberg Kravis Roberts, TPG and Warburg Pincus, along
with CVC's local rival Cinven Group Ltd., people said.
The auction is unlikely to attract many strategic buyers, people
said.
However, Efes Breweries International N.V. (EBID.LN) has
expressed interest, people said, and SABMiller PLC (SAB.JO) may
also be interested but could have antitrust issues in the Czech
Republic.
Other trade players such as Carlsberg A/S (CARL-A.KO) and
Heineken Holding N.V. (HEIO.AE) are digesting acquisitions and
trying to pay down debt, which may prevent them from bidding.
The process is being run under a tight timeframe with
information packages due out within the next week or so, the people
added.
Analysts said that a sales price of EUR2 billion just for AB
InBev's Central European business, excluding Russia and Ukraine,
would be reasonable. AB InBev sells about 15 million hectolitres of
beer annually across the seven countries - Bulgaria, Romania,
Hungary, Czech Republic, Croatia, Serbia and Montenegro.
The company's two largest markets in the region, Russia and
Ukraine, aren't included in the sale, people said.
Further, the brewer is no longer under pressure to sell assets
after reaching a deal to sell its South Korean brewing business to
Kohlberg Kravis Roberts for $1.8 billion in April. The company has
also refinanced billions in short-term debt in the bond market over
the last several months.
For private equity buyers, beer is a good business to lend
against but financing is still tricky with debt remaining hard to
come by. Lenders will also have to be comfortable with the range of
jurisdictions in which the assets are located, one of the people
said But a debt package amounting to EUR600 million to EUR800
million is possible, this person added.
Barclays PLC (BCS) is advising AB InBev on the sale. InBev
declined to comment. Barclays wasn't immediately available to
comment.
-By Marietta Cauchi, Carol Dean and Matthew Dalton, Dow Jones
Newswires; +44 207 842 9241;