Heineken NV share price up, turns down a takeover bid by SABMiller to remain independent

Heineken announced that it rejected a takeover offer made by SABMiller Plc because the family that controls the company prefers it to remain independent.

According to people familiar with the process, who asked not to be named because the information is not public, the preliminary acquisition bid of SABMiller was turned down by the owners of Heineken only a couple of weeks after the offer was made.

One of the people shared that if the bid was accepted, the deal would have made Heinekens controlling family one of the largest shareholders of the combined company. An eventual merger would have also consolidated the company and would have allowed it to fend off a takeover offer from its rival Anheuser-Busch InBev NV. The offer of SABMiller was described by Heineken as “non-actionable”.

“Heineken has consulted with its majority shareholder and concluded that SABMillers proposal is nonactionable,” Heineken said in a written statement, which was cited by the Wall Street Journal.

The members of Heinekens controlling family turned down the offer of SABMiller because they want to keep full control of the brewer, which has a market capitalization of more than €34 billion ($44 billion). Currently the controlling shareholders, the De-Carvalho family, hold a 50.1% stake in Heineken. The company has been pressed by competitive brewers over the last few years but still remains a difficult target.

Matthew Beesley, portfolio manager and head of global equities for London-based Henderson Global Investors Ltd, commented for Bloomberg: “For SAB, a way of preserving their independence is to buy Heineken. It’s easy to underestimate the desire for management teams to be in control of their own destiny rather than to sell their business at a very high price.”

Heineken NV added 1.65% to trade at €60.41 per share at 07:38 GMT in Amsterdam, marking a one year change of +17.90%. The company is valued at €34.23 billion. According to the Financial Times, the 25 analysts offering 12-month price targets for Heineken NV have a median target of €59.00, with a high estimate of €72.50 and a low estimate of €47.00. The median estimate represents a -0.72% decrease from the previous close of €59.43.