SABMiller said to have rejected informal offer from AB InBev

HONG KON (BLOOMBERG) - SABMiller Plc rejected an informal takeover offer from Anheuser-Busch InBev NV that it considered too low, according to people familiar with the matter.

The initial proposal to the brewer of Peroni and Foster's beer, made last week, was worth slightly over 40 pounds (S$86) a share, while its executives and some shareholders regard a deal at closer to 45 pounds as representing a fair value, the people said, asking not to be identified as details of the negotiations aren't public. A deal at 45 pounds per share would value SABMiller at about 73 billion pounds, and would be the largest merger this year.

London-based SABMiller communicated to AB InBev the terms at which it would be willing to negotiate after the rejection, one of the people said. No final decision has been made on a potential formal offer, and it's possible the Belgian producer of Budweiser and Stella Artois may walk away from a deal, they said.

Representatives for AB InBev and SABMiller declined to comment.

SABMiller on Tuesday released a surprise trading update nine days earlier than planned, in which it announced that beer volume had returned to growth in the second quarter, helped by Africa and Latin America - a trend that could figure into a sweetened offer from AB InBev.

If successful, the combination would create a dominant global player in the brewing industry, which has been re-aligned through a decade of increasingly large mergers, and attract heavy scrutiny from antitrust regulators around the world. Controlled by a group of wealthy Brazilian investors led by Jorge Paulo Lemann, AB InBev is itself the result of deals to unite major Belgian, American, and Latin American brewers.

AB InBev had already reached out to Altria Group Inc., SABMiller's biggest shareholder, before it announced plans to make an approach for its rival, people with knowledge of the matter said on Sept. 18. It's lining up lenders including Bank of America Corp. and Banco Santander SA to arrange as much as US$70 billion in financing for its takeover proposal, people familiar with the matter said last week.

Under U.K. takeover rules, AB InBev has until 5 p.m. on Oct. 14 to make an offer or announce it doesn't intend to proceed. SABMiller may also ask regulators for an extension to that deadline.