6/9/08

Curious about the InBev BUD Rumor

Anheuser Busch (BUD), the largest American brewer, has seen its shares jump recently on a rumor that InBev is going to buy it for $65 a share. BUD closed on Friday at $57.28, about 13.5% less than that potential buyout price.

What I'm curious about is, how does a company with a market cap of 29 billion Euros (currently about $45.8 billion) afford to buy something for over $46 billion? It has to borrow money, obviously. But what group of lenders would be willing to put up so much cash, especially in the current tight credit environment?

It's certainly possible that the deal could materialize, but I think it's unlikely. If it is just a rumor, and the rumor goes away, where will BUD be trading then?

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