BUD – 24/7 Wall St.

Posts for Ticker ‘BUD’

InBev And BUD: Pushing Out Another Board

Perhaps this will be the year when replacing corporate boards hits a record level. Carl Icahn wants to do it at Yahoo! (YHOO). Several large investors have been taking a run at AIG (AIG). Now, InBev, which is trying to buy Anheuser-Busch (BUD) wants to replace the representatives of the shareholders there.

To rub salt into the wounds of BUD’s management, the "alternative board includes Adolphus Busch IV, the great-grandson of the Anheuser-Busch founder and the uncle of the current Anheuser-Busch chief executive, August Busch IV, according to MarketWatch.

Perhaps InBev does not need to go that far if the current board will do the right thing. The InBev bid has taken the BUD stock up to over $62. Over the last five years, the 200-day moving average of the shares has usually been well below $50.

Perhaps it seem simplistic, but a bird in the hand is worth two in the bush. That becomes even more true when the economy gets bad. BUD faces a very significant increase in its transportation costs as the price of gas moves up.

BUD’s earnings have not been outstanding over the last three years. A recession would make that worse, especially if the element of rising inflation is added. Moving up beer prices may be hard to do if the consumer has a dwindling supply of money. He may have to turn to cheap wine of moonshine.

The BUD board has the chance to drop the company’s problems into the lap of someone else. It should sell out to InBev as soon as possible.

Douglas A. McIntyre

Posted on: July 7, 2008 – 5:37 am in Management Change, AIG, BUD, YHOO

Media Digest 7/7/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, NBC Universal and partners will by The Weather Channel for $3.5 billion.

Reuters writes that Toyota (TM) will add solar panels to some of its Prius cars.

Reuters writes that broken buy-out deals have strained trust among corporations, banks, and prvate equity firms.

Reuters reports that Merrill Lynch (MER) is considering selling its stakes in Bloomberg and Blackrock.

The Wall Street Journal reports that GM (GM) is considering thousands of job cuts and the sale or closing of some of its brands.

The Wall Street Journal reports that the rising price of oil is causing more fear that crude will hit $200 by the end of the year.

The Wall Street Journal reports that vacancies are rising in retail centers.

The Wall Street Journal writes that plans to revise the bond rating system may not go far enough.

The Wall Street Journal writes that energy and materials stocks may follow the rest of the market lower.

The Wall Street Journal writes that analysts believe S&P 500 earnings will drop 11.5% in Q2, but that number may underestimate problems.

The Wall Street Journal reports that automakers are pushing back on steel surcharges.

The Wall Street Journal writes that Immelt of GE (GE) will have to continue to defend the conglomerate structure of the company.

The New York Times writes that Google (GOOG) must challenge rules of competition and antitrust as Microsoft (MSFT) has done over the last two decades.

The FT writes that InBev has selected an alternative board for Anheuser-Busch (BUD).

The FT reports that delays in making more Toyota Prius cars are testing customer patience.

Bloomberg reports that the LBO market is getting a push forward with the successful buy-out of BCE.

Bloomberg reports that US profits probably fell in the last quarter lead by Citigroup (C) and Merril Lynch (MER)

Douglas A. McIntyre

Posted on: July 7, 2008 – 2:52 am in Press Digest, BUD, C, GE, GM, MER, TM

Media Digest 7/1/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, global companies may start to issue profit warnings as business slows overseas.

Reuters reports that InBev is sticking to it offer to buy Anheuser-Bush (BUD).

Reuters reports that Chrysler is shutting minivan plants.

Reuters writes that financial executives are still looking for companies that they can buy cheap and improve.

Reuters reports that Lehman (LEH) rose after Morgan Stanley gave the brokerage a positive rating.

Reuters reports that Florida has sued Countrywide over its mortgage practices.

Reuters reports that Ford (F) was in talks to sell Volvo to Renault.

The Wall Street Journal writes that federal authorities want the names of UBS (UBS) clients who may have used the bank to dodge taxes.

The Wall Street Journal writes that Sirius (SIRI) put out financial forecasts for the firm once it combines with XM Radio (XMSR).

The Wall Street Journal writes that the US corn crop is mostly intact even after Midwest flooding.

The Wall Street Journal reports that UBS is likely to issue another profit warning.

The Wall Street Journal writes that Starbucks (SBUX) new coffee has attracted new customers and some critics.

The Wall Street Journal reports that Ford (F) is trying to maintain the vitality of its flagship product, the F-Series pick-up.

The Wall Street Journal reports that Teva (TEVA) has begun to ship a generic version of schizophrenia treatment Risperdal.

The New York Times reports that the Saudi Khurais oil field, one of the largest in the world, may not do as well as many had hoped.

The New York Times writes that business activity in the Midwest remained weak in June.

The FT reports that Warner Music (WMG) has signed up for Nokia’s (NOK) music service.

Bloomberg reports that Eli Broad says the current recession is the worst since WWII and believes the housing market will not recover for years.

Bloomberg writes that Bank of America (BAC) will pay about one-third less for Countrywide (CFC) than it had planned.

Douglas A. McIntyre

Posted on: July 1, 2008 – 3:10 am in Press Digest, BAC, BUD, CFC, F, Leh, NOK, SBUX, SIRI, TEVA, UBS, WMG, XMSR

Media Digest 6/28/2008 (MBI)(SI)(LEH)(MER)(BUD)

According to Reuters, the Anheuser-Busch (BUD) board is under pressure to justify what it did not take InBev’s buy-out offer.

Reuters writes that overseas money is reluctant to invest in US car companies.

Reuters reports that consumer spending moved up as people got federal rebate checks.

Reuters reports that Lehman (LEH) says Merrill Lynch (MER) may write-down $5.4 million in Q2.

Reuters reports that Moody’s is likely to cut Morgan Stanley’s (MS) credit rating.

The Wall Street Journal reports that the Dow has hit bear market territory.

The Wall Street Journal writes that Siemens (SI) will cut over 17,000 jobs.

The Wall Street Journal reports that Anheuser-Busch will lay-off 1,000 people. raise prices, and buy-back more shares.

The Wall Street Journal writes that handset company Sony-Ericsson warned that its business was doing poorly.

The Wall Street Journal writes that MBIA (MBI) is selling munis to raise cash.

The New York Times reports that venture investors had an unusually poor quarter.

The FT writes that Merrill Lynch is considering selling its stakes in Blackrock and Bloomberg in the hope of raising $15 billion.

Douglas A. McIntyre

Posted on: June 28, 2008 – 4:40 am in Press Digest, BUD, Leh, MBI, MER, MS, SI

Media Digest 6/27/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, M&A activity is down sharply.

Reuters writes that Anheuser-Busch (BUD) turned down an offer from InBeve.

Reuters reports that Yahoo! (YHOO) has realigned its senion management

Reuters reports that China Mobile (CHL) said it was making progress with Apple (AAPL) on iPhone distribution.

The Wall Street Journal reports that Mozilo of Countrywide (CFC) helped many people get loans.

The Wall Street Journal writes that the Fed will make it easier for private equity firms to invest in banks.

The Wall Street Journal writes that IACI (IACI) will take a $300 million goodwill hit.

The Wall Street Journal write that the new Centro did not keep Palm (PALM) from a big loss.

The New York Times writes that a suit claims that UBS (UBS) misled investors.

The New York Times writes that Sony (SNE) has put together a plan to improve returns in its electronics businesses.

The Wall Street Journal writes that Ford (F) is offering buy-outs at some of its plants.

The Wall Street Journal reports that a memo from Microsoft’s (MSFT) Ballmer offers clues about what he will do with the company.

The New York Times writes that Chrysler brought back Lee Iacocca to give employess a pep talk.

The FT writes that Verizon (VZ) is pressing Vodafone (VOD) to exit its piece of Verizon Wireless.

Bloomberg writes that AIG (AIG) is facing another $5 billion in write-downs.

Douglas A. McIntyre

Posted on: June 27, 2008 – 3:04 am in Uncategorized, AAPL, AIG, BUD, CFC, CHL, F, IACI, PALM, SNE, VOD, VZ, YHOO

BUD: An Ethical Lapse By The Board

Anheuser-Busch (BUD) is threatened by an InBev takeover like its home city of St. Louis is menaced by the rain-swollen Mississippi. But, BUD took its first step to save itself by rejecting InBev’s $46.3 billion offer. The company’s board thinks it can improve "shareholder value" on its own.

That is not likely and it points to a breakdown in the ethics of board members faced with an rich offer to buy the company they control. No one with an abacus or calculator could possibly make the case that BUD can get its business in order in a way that would push its share price to the level that InBev has on the table.

After InBev announced its assault, BUD’s stock price went as high as $62.72. A look at the company’s share price back to 1983 shows that the value of Anheuser-Busch has never been nearly this high. Over the last two years, the price of the stock has only averaged about $50.

BUD says it could sell off its theme parks and packaging company to try to get the stock up. It could also cut costs. It could have done those things before, but it didn’t.

For the last three years, Anheuser-Busch’s operating income has run about $2.7 billion. It show no signs of rapid growth, which means the market value of the company has not reason to move up.

Boards have a simple ethical obligation to shareholders. At BUD, the board has breached that promise. In his heart of hearts each member knows that if InBev walks away, Anheuser-Busch shares drop back to $50.

Douglas A. McIntyre

Posted on: June 26, 2008 – 4:43 am in Mergers and Buy Outs, BUD

Media Digest 6/26/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Anheuser-Busch (BUD) will reject a $46.3 billion buy-out from InBev.

Reuters writes that Oracle (ORCL) posted strong earnings but its outlook was light.

Reuters reports that RIM (RIMM) has an excellent quarter but weak guidance.

Reuters reports that the Fed held rates buy showed concern about inflation.

Reuters writes that Goldman Sachs (GS) says Citigroup (C) may have $9 billion in write-downs in the current quarter.

Reuters reports that Sony (SNE) expects 10% ROE in three years on TVs, Blu-ray and chips.

Reuters reports that Jerry York, adviser to billionaire investor Kirk Kerkorian said auto sales will not recover in the second half.

The Wall Street Journal writes that three more states have filed suits against Countrywide (CFC).

The Wall Street Journal writes that no one is rushing to buy GE’s credit card operations.

The Wall Street Journal reports that the head of Yahoo! (YHOO) wrote to shareholders defending the company’s reaction to the Microsoft (MSFT) offer

The Wall Street Journal writes that Fitch cut its creditor default ratings on Ford (F) and GM (GM).

The New York Times writes that the Supreme Court cut awards against Exxon (XOM) in the Valdez case.

The FT writes that the ECB may raise interest rates.

Bloomberg writes that Goldman Sachs (GS) and four other banks sold $1.7 billion in LBO debt for 70 cents on the dollar.

Douglas A. McIntyre

Posted on: June 26, 2008 – 2:57 am in Press Digest, BUD, C, CFC, F, GE, GM, GS, MSFT, ORCL, RIMM, SNE, XOM, YHOO

BUD To Blow Off InBev Bid, Betray Investors

Word from several media sources is that Anheuser-Busch (BUD) will turn down a $46.4 billion offer from InBev. The offer had pushed BUD shares as high $62.72. In the previous five years, the stock never made it above $55.

The walk-away is arrogant. If the BUD board believes the company is worth over $60 a share, they have done nothing to demonstrate it. As recently as March, the shares were below $46.

The Wall Street Journal reports that BUD may consider selling off its theme parks and packaging businesses to improve shareholder value.

Hard to imagine why they did not think of that before.

Douglas A. McIntyre

Posted on: June 25, 2008 – 6:20 pm in Uncategorized, BUD

Media Digest 6/19/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Paulson will push for more market and financial regulations.

Reuters writes the Anheuser-Busch (BUD) board will meet on the InBev offer.

Reuters reports that the GAO was critical of the Air Force decision to give a tanker project to Northrup Grumman (NOC), leaving an opening for Boeing (BA).

Reuters writes that GM (GM) is slowing development of new SUVs.

Reuters reports that HP (HPQ) will reorganize ifts printer business.

The Wall Street Journal reports that banks are changing accounting to mask financial troubles.

The Wall Street Journal reports the off-shore drilling will take years to add to oil supply.

The Wall Street Journal reports that Apollo Management is trying to kill its deal to buy Huntsman (HUN).

The Wall Street Journal writes that Thornburg Mortgage (TMA) has said it survival is in doubt.

The Wall Street Journal reports that Sprint’s (S) new smartphone will cost $129.

The Wall Street Journal writes that the CEO of Hearst quit.

The Wall Street Journal writes that Pfizer (PFE) has cut a deal to keep a cheap version of Lipitor off the market until 2011.

The Wall Street Journal says Toyota (TM) truck sales are faltering in the US.

The Wall Street Journal writes that AT&T (T) is asking Dish Network to buy back $500 million in securities.

The Wall Street Journal reports that Verizon (VZ) is boosting the speed of its fiber-to-the-home product.

The New York Times reports that a shortage of ships is delaying some off-shore drilling projects.

The New York Times writes that Americans are driving less due to higher gas prices.

The FT writes that hedge fund manager John Paulson says that the financial markets will get much worse.

Bloomberg writes that Cerberus is troubled by cash consumption at Chrysler.

Douglas A. McIntyre

Posted on: June 19, 2008 – 2:58 am in Press Digest, BA, BUD, HPQ, HUN, NOC, PFE, S, T, TM, VZ

When Defensive Stocks Fail Too (PEP, KO, BUD, TAP, KFT, CAG, CPB, HRL, MCD, MO, PG, CL, MRK, JNJ)

It used to be that DEFENSIVE STOCKS were the way to go during periods of uncertainty and during times of market sell-offs. But now that isn’t even working out. After we looked at our first line defensive stocks only a piss poor reading of 3 out of 14 were up on the day. Sure the DJIA dipped under 12,000 briefly and closed down 131.24 at 12,029.06, and the overall trend of the market is bad and feels like it wants to go worse. To make matters worse, one of the three that are up was up because it is a takeover play currently.

PepsiCo (PEP)             $65.06 -$0.81 (-1.23%)
Coca-Cola (KO)             $53.16 -$0.80 (-1.48%)
Anheuser-Busch (BUD) $61.90 +$0.70 (+1.14%)
Molson-Coors (TAP)       $55.53 +$0.70 (+1.28%)
Kraft (KFT)                      $30.00 -$0.32 (-1.06%)
ConAgra (CAG)             $22.01 -$0.44 (-1.96%)
Campbell Soup (CPB)    $33.51 -$0.25 (-0.74%)
Hormel (HRL)                $35.75 -$0.41 (-1.13%)
McDonalds (MCD)          $58.21 -$1.00 (-1.69%)
A’tria (MO)                      $20.71 -$0.01 (-0.05%)
P&G (PG)                      $65.00 -$0.80 (-1.22%)
Colgate Palmolive (CL)    $71.71 -$0.68 (-0.94%)
Merck (MRK)                   $34.86 +$0.18 (+0.52%)
J&J (JNJ)                         $64.44 -$1.15 (-1.75%)

In an environment where consumers are spending less and less it seems that even the safe haven stocks aren’t immune as they once were. Every one of these operations is suffering from issues that weren’t present, or not as much, in 2007 and 2006 such as a weaker consumer, higher energy costs, higher materials costs, and higher delivery/transport cost. At a time where the market wants to buy agricultural stocks, energy and alternative energy, and defense/war stocks, the traditional names just aren’t working. Pity.

Jon C. Ogg
June 18, 2008

Posted on: June 18, 2008 – 3:38 pm in Defensive Stocks, BUD, CAG, CL, CPB, HRL, JNJ, KFT, KO, MCD, MO, MRK, PEP, PG, TAP

Warren Buffett Supports InBev Bid For Anheuser-Busch (BUD)

Belgian newspaper De Standaard has reported that Warren Buffett is prepared to throw the Busch family under the bus and support the InBev offer to buy Anheuser-Busch for $46 billion or $65 a share.

More than any other trait, it is Buffett’s good sense that has made him the world’s richest man.

BUD can’t do anything to get the price of its stock up. It already owns 50% of the US beer market and does well overseas. Its plan to buy the part of Mexican brewer Grupo Modelo that it does not already own will simply pile on debt of dilute BUD shareholders.

Buffett can read the Anheuser-Busch stock chart as well as anyone. The company has never traded above $60 before. It the InBev deal goes away, it will never trade there again.

Douglas A. McIntyre

Posted on: June 17, 2008 – 4:46 am in Mergers and Buy Outs, BUD

Media Digest 6/17/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

Accoriding to MarketWatch, Belgian newspaper De Standaard reports that Warren Buffett support a takeover of Anheuser-Busch (BUD) by InBev.

According to Reuters, economists think the PPI will rise 1%.

Reuters writes that a key Yahoo! (YHOO) executive has left for a venture capital firm.

Reuters reports that Adobe (ADBE) posted disappointing earnings.

The Wall Street Journal writes that the Fed is likely to keep rates unchanged.

The Wall Street Journal reports that hedge funds are going though a major shake-out with smaller firms having hte most trouble.

The Wall Street Journal reports the flood in the Midwest could drive food prices higher.

The Wall Street Journal reports that Intel (INTC) will spin-off its solar panel unit.

The Wall Street Journal reports that Barclays (BCS) may seek more capital.

The Wall Street Journal writes that the new CEO of AIG (AIG) says the company still faces major earnings risks.

The Wall Street Journal reports that Disney (DIS) is adding to its list of teenage stars.

The Wall Street Journal writes that hurdles still remain to closing the Sirius (SIRI) merger with XM (XMSR).

The Wall Street Journal writes that newspaper chain McClatchy (MNI) cut 10% of its work force.

The Wall Street Journal reports that Google (GOOG) will try to get Yahoo! (YHOO) instant messaging service to work with its to expand the network of the products.

The New York Times writes that the head of Lehman (LEH) still remains confident about the firm’s future.

The New York Times reports that Honda (HMC) has launched a hydrogen powered car.

The New York Times writes that Bernanke feel healthcare costs may be among largest challenges to economy.

The FT writes that oil hit a new high near $140 a barrel.

According to Bloomberg, fixed income profits at Goldman Sachs (GS) and Morgan Stanley (MS) mask their reliance on commodities.

Douglas A. McIntyre

Posted on: June 17, 2008 – 2:52 am in Press Digest, ADBE, AIG, BUD, DIS, GOOG, HMC, INTC, Leh, MNI, SIRI, XMSR, YHOO

Media Digest 6/16/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, AIG (AIG) fired its CEO and replaced him with the company’s chairman.

Reuters reports that Carl Icahn says the Yahoo! (YHOO) deal with Google (GOOG) has merit.

Reuters writes that the CEO of Skype says he has full support from his parent, EBAY (EBAY).

Reuters reports that the FCC chairman will back the Sirius (SIRI) merger with XM (XMSR).

Reuters writes that InBev has cautioned Anheuser-Busch (BUD) about doing a deal with Modelo.

Reuters reports that Carl Icahn is likely to lose his proxy fight with Biogen.

The Wall Street Journal reports that two Bear Stearns hedge fund managers may face criminal charges over the collapse of their funds.

The Wall Street Journal writes that Sony (SNE) will launch the show "Angel of Death" online.

The Wall Street Journal writes that Moody’s (MCO) has begun to include online sales of retailers when setting credit ratings.

The Wall Street Journal writes that Cisco (CSCO) has released it projections for online video growth.

The Wall Street Journal writes that IBM (IBM) has started to develop solar technology.

The Wall Street Journal writes that the EU is planning to regulate bond rating agencies.

The Wall Street Journal writes that Wall St. has slashed earnings estimates for Morgan Stanley (MS) and Goldman Sachs (GS).

The Wall Street Journal writes that working out the financial details of spinning out Motorola’s (MOT) handset division will be hard.

The Wall Street Journal writes that Chrysler will raise prices on its new car models.

The Wall Street Journal writes that Kellogg is shrinking boxes to pass costs on to consumers.

The New York Times writes that half of the profits of major Wall St. firms have disappeared in a year.

The New York Times writes that the AP will set rules for use of its content in blogs.

The FT writes that the Saudis may increase their oil supply.

The FT reports that investors who put money into US financial firms earlier this year have lost $10 billion.

Bloomberg reports that corn prices hit another record.

Douglas A. McIntyre

Posted on: June 16, 2008 – 3:01 am in Press Digest, AIG, BUD, CSCO, EBAY, GOOG, GS, IBM, MCO, MOT, MS, SIRI, SNE, XMSR, YHOO

Jerry Yang And August Busch IV: Founder’s Day (YHOO)(BUD)

Two thousand years from now, when archaeologists dig up the bones of present-day CEOs, they will find that those who were in any way related to their company’s founders had a mutated gene in the DNA which kept them from accepting generous offers for their companies.

Perhaps it is nothing more than the need to save their pride. Yesterday, Yahoo! (YHOO) finally rejected a bid from Microsoft (MSFT). The shares now trade about $10 below the offer from Redmond. The stock had not been above $35 since early 2006 and is not likely to get back there anytime soon. Miserable earnings will see to that.

Over at the beer company, Anheuser-Busch (BUD) has an offer of $65 from InBev. The stock has never traded that high. It appears that BUD is trying to cut an M&A deal with Grupo Modelo that would make the combined Mexican/US company too expensive for InBev to buy.

In is very likely that the shares in both companies will drop by a quarter to a third because the "founding families" do not want to give up their jobs.

It might be worthwhile to check with a therapist to see what is going on, but interpreting the actions may not be that complex.

The Busch family, now four generations away from the life of their founder, and Jerry Yang, a founder in full, are already rich and the premium they would get for their shares is not useful. They already have the four homes and private jets. The extra cash does them no good.

But, being the head of a big company is not a set of circumstances that can be replaced. The numbers of CEOs at really large US companies measures in the hundreds. Rich people are a dime a dozen.

Yang and Busch have likely arranged to keep their jobs. The shareholder will not get their yachts.

Giving up a right due to an obligation does not seem to be part of the make-up of these people. If they went away, it would cut down on the number of people who are both rich and powerful. That would be a shame.

Douglas A. McIntyre

Posted on: June 13, 2008 – 4:40 am in Mergers and Buy Outs, BUD, MSFT, YHOO

Media Digest 6/13/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Pfizer (PFE) may make a counter-bid for Ranbaxy Laboratories, the generic drug-maker.

Reuters reports that deal talks between Yahoo! (YHOO) and Microsoft (MSFT) are dead. Yahoo! will do an advertising deal with Google (GOOG).

Reuters writes that Anheuser-Busch (BUD) and Modelo are in merger talks.

Reuters reports that Exxon (XOM) will get out of the US gas retail business.

Reuters reports that China Investment Corp is turning its back on countries that are suspicious of sovereign wealth funds.

Reuters reports that US Air (LCC) will cut 1,700 jobs and some of its flight capacity.

The Wall Street Journal writes that AIG’s (AIG) financial-products business has become the focus of government probes.

The Wall Street Journal reports that Lehman (LEH) pushed out its CFO and COO.

The Wall Street Journal writes that government tax rebates helped retail sales.

The Wall Street Journal writes that Qualcomm (QCOM) has raised it forecasts.

The New York Times writes that companies which can’t get loans from banks are turning to hedge funds.

The New York Times writes that the FCC has put together a plan to stop high fees consumers face for cancelling cell phone plans.

The FT writes that InBev has promised to keep the Anheuser-Busch brands in St. Louis if it takes over the company.

The FT writes that Ford (F) has called for US help in building electric cars.

Bloomberg writes that European cars sales fell almost 8% last month with Toyota (TM) and Ford off sharply.

Douglas A. McIntyre

Posted on: June 13, 2008 – 4:14 am in Press Digest, AIG, BUD, F, GOOG, LCC, Leh, MSFT, PFE, QCOM, XOM, YHOO