Anheuser-Busch says no to $46B InBev proposal

— -- A press release and three-page letter by Chairman and CEO August Busch IV to InBev Chief Executive Carlos Brito was the first public response to the $46 billion takeover proposal made on June 11.

In the letter, Busch, a member of the founding family who became president and CEO in 2006, said that the board "unanimously concluded your proposal is inadequate and not in the best interests of Anheuser-Busch shareholders."

The letter said the board "carefully and thoroughly examined all aspects of your proposal with the assistance of independent advisers."

A-B, whose stock price had been flat for about five years until the InBev proposal, was expected at least to turn down the initial offer. A-B may be jockeying for more money, though InBev has stated publicly that it stands by its $65-per-share offer. A-B stock rose 65 cents to $62 in after-hours trading on Thursday.

"This is turning into a nice barroom brawl," says Juli Niemann, analyst at Smith Moore in St. Louis. "Clearly, they are gunning for a higher cash price, and $65 is a really, really good price. It's also a face-saving thing, as well. You won't see $65 a share in my lifetime, even with a restructuring by A-B."

Niemann says there's a chance that InBev could sweeten its offer with InBev stock, which has been a "good performer."

InBev has grown through acquisitions and has generated shareholder value through sharp cost-cutting measures. Brito has aggressively pursued Anheuser-Busch publicly with three letters and lengthy videos citing promises to keep open A-B's 12 U.S. breweries, retain Budweiser's global headquarters in St. Louis and incorporate the heritage of Anheuser-Busch into the name of the combined entity.

On Thursday, Brito notified A-B that it had sought a ruling in Chancery Court in Delaware, where A-B is incorporated, to see if it could seek shareholder approval to remove without cause A-B's 13 board members. Eight board members are subject to removal without cause under A-B's charter and Delaware law, but five others can be removed only through written consent by shareholders.