E-Malt.com News article: 2336

Brazil: One of AmBev’s minority shareholders has questioned the company’s merger with Interbrew. The state-run Caixa de Previdencia dos Funcionarios do Banco do Brasil (Previ), Latin America's largest pension fund, which owns 14.7% of AmBev’s non-voting stock and 8% of its total capital, plans to ask Brazilian securities regulators to review the $11.2 billion takeover by Interbrew SA that sparked the decline in the shares, said Chief Investment Officer Luiz Carlos Aguiar. He said he's concerned that Ambev will issue new shares to pay Interbrew for Canadian brewer Labatt as part of the takeover agreement, reducing the value of the shares.

“We are most concerned about having our holdings diluted, and we're not sure the price for Labatt is the right price,” Aguiar said at a news conference at the fund's Rio de Janeiro headquarters. “We were very surprised by this takeover.”
Previ claims to have lost around 600m reals (US$206.4m) on its stock since the agreement was confirmed.

Previ executives plan to meet with other minority shareholders, which have seen price of their preferred Ambev stock fall 28 percent since Interbrew announced the takeover on March 3.

AmBev's ordinary voting shares, which will receive a premium price as part of the deal, have climbed by 15% 1 March, two days before the deal was announced. Non-voting stock, however, has tumbled by 33% over the same period.

Speaking to Dow Jones, Previ's investment director, Luiz Aguiar, said: “We're going to ask the CVM (Brazil’s securities regulator) to look into this next Tuesday.” He added that regulators should also ask AmBev and its advisor, Citibank, to move faster in making important documents available to the public.

A number of minority shareholders have complained that the Americas assets acquired by AmBev were overvalued. Under Brazilian law, however, controlling shareholders are allowed to negotiate a premium price for their shares.


16 March, 2004