Anheuser-Busch InBev Thread

the central scrutinizer · PostDec 17, 2008#6512008-12-17T22:10+00:00

dweebe wrote:This can't be good.

http://www.bloomberg.com/apps/news?pid= ... refer=home

AB InBev Lenders Said to Offer Loans at 9% Discount (Update2)

By Caroline Hyde

Dec. 17 (Bloomberg) -- Lenders to Anheuser-Busch InBev NV are offering to sell part of the brewer’s $45 billion of senior loans for as little as 91 cents on the dollar, according to two people familiar with the transaction.

InBev NV, based in Leuven, Belgium, raised the second- biggest loan ever to help finance the $52 billion acquisition of Budweiser-maker Anheuser-Busch Cos. last month. The lenders started offering the debt to other investors today, said the people, who declined to be named because the talks are private.

Loan prices have fallen as banks and financial companies have been forced to sell debt amid the worst financial crisis since the Great Depression. Investment-grade loans traded at an average 97 percent of face value, after dropping 2 percentage points this year, according to Reuters Loan Pricing Corp.

“The loans trade at a discount as AB InBev is now highly leveraged for an investment-grade company,” said Louis Gargour, chief investment officer at London-based hedge fund LNG Capital LLP.

InBev’s total borrowing is as much as 6 times earnings, according to Fitch Ratings. That compares with rival SABMiller Plc’s debt ratio of about 2.5 times, and Carlsberg A/S levels of 3 to 4 times, Fitch said in a Nov. 19 report...

continues

The banks would rather have 91 cents of every dollar now, rather than 100 cents 20 years from now.

dweebe · PostDec 17, 2008#6522008-12-17T22:20+00:00

The Central Scrutinizer wrote:
dweebe wrote:This can't be good.

http://www.bloomberg.com/apps/news?pid= ... refer=home

AB InBev Lenders Said to Offer Loans at 9% Discount (Update2)

By Caroline Hyde

Dec. 17 (Bloomberg) -- Lenders to Anheuser-Busch InBev NV are offering to sell part of the brewer’s $45 billion of senior loans for as little as 91 cents on the dollar, according to two people familiar with the transaction.

InBev NV, based in Leuven, Belgium, raised the second- biggest loan ever to help finance the $52 billion acquisition of Budweiser-maker Anheuser-Busch Cos. last month. The lenders started offering the debt to other investors today, said the people, who declined to be named because the talks are private.

Loan prices have fallen as banks and financial companies have been forced to sell debt amid the worst financial crisis since the Great Depression. Investment-grade loans traded at an average 97 percent of face value, after dropping 2 percentage points this year, according to Reuters Loan Pricing Corp.

“The loans trade at a discount as AB InBev is now highly leveraged for an investment-grade company,” said Louis Gargour, chief investment officer at London-based hedge fund LNG Capital LLP.

InBev’s total borrowing is as much as 6 times earnings, according to Fitch Ratings. That compares with rival SABMiller Plc’s debt ratio of about 2.5 times, and Carlsberg A/S levels of 3 to 4 times, Fitch said in a Nov. 19 report...

continues

The banks would rather have 91 cents of every dollar now, rather than 100 cents 20 years from now.

That's not my big concern; it's that real ugly debt ratio. That's Amy Winehouse first thing in the morning ugly.

zink · PostDec 18, 2008#6532008-12-18T15:52+00:00

Dudes, its all good. Brito went to Stanford, he knows what up.

On another note, do you think Inbev could have done something better with 52 billion dollars? Built a couple breweries in the US, partner with a nationwide transportation company, blitz marketing which I am sure in the end would have stolen TONS of market share from all brewers in the US.

the central scrutinizer · PostDec 18, 2008#6542008-12-18T17:00+00:00

zink wrote:Dudes, its all good. Brito went to Stanford, he knows what up.

Yes he did. He's a very bright person.

matguy70 · PostDec 18, 2008#6552008-12-18T18:43+00:00

Few observations at the home headquarters.

I'm an outsider from AB - but I live near the headquarters. For the past 10 years everyday when I exit at Arsenal - the huge "AB sign that says "Come Visit Us" and the clydesdales on the building has NEVER EVER had a burnt out bulb for more than one night. The neon is always perfect. For the past two weeks the bulbs are dimming and several are now out. How sad.

As for the Christmas lights - they were reduced about, IMO, 40 percent this year. No big tree in the center circle and no lights along Broadway.

Just my observations, I don't like it.

the central scrutinizer · PostDec 18, 2008#6562008-12-18T18:47+00:00

matguy70 wrote:Few observations at the home headquarters.

I'm an outsider from AB - but I live near the headquarters. For the past 10 years everyday when I exit at Arsenal - the huge "AB sign that says "Come Visit Us" and the clydesdales on the building has NEVER EVER had a burnt out bulb for more than one night. The neon is always perfect. For the past two weeks the bulbs are dimming and several are now out. How sad.

As for the Christmas lights - they were reduced about, IMO, 40 percent this year. No big tree in the center circle and no lights along Broadway.

Just my observations, I don't like it.

They are becoming a greener company by cutting back on electric usage.

threeonefour · PostDec 18, 2008#6572008-12-18T21:13+00:00

dweebe wrote:That's Amy Winehouse first thing in the morning ugly.

=D>

I think that qualifies as the Urban St. Louis Post of the Day, dweebe.

jlblues · PostDec 18, 2008#6582008-12-18T21:37+00:00

The Central Scrutinizer wrote:They are becoming a greener company by cutting back on electric usage.

"Green" is only "good" when it has an impact on someone else's life, dammit!

matguy70 · PostDec 20, 2008#6592008-12-20T15:48+00:00

The "O" and "S" in "cOme visit uS" is almost out as of last night.

It's really sad. Like I said, it is the first time in 10 years I have ever seen bulbs dim or out in the grand sign. I was always amazed that it stayed so perfect so I recognize things like that.

jcity · PostDec 22, 2008#6602008-12-22T06:25+00:00

like i've said. inbev will tarnish this brand(s), the example of the lights is just the canary in the coal mine.

innov8ion · PostDec 22, 2008#6612008-12-22T11:55+00:00

JCity wrote:like i've said. inbev will tarnish this brand(s), the example of the lights is just the canary in the coal mine.

Why so incessantly bitter, JCity? Life is too short. For whatever reason, your mind appears to be wired to see only doom and gloom ever since the deal presented itself. You can't be objective?

the central scrutinizer · PostDec 22, 2008#6622008-12-22T13:23+00:00

JCity wrote:like i've said. inbev will tarnish this brand(s), the example of the lights is just the canary in the coal mine.

Yep. They even spent 52 billion dollars to have the chance to do that! I know someone who is an executive assistant at the brewery, and she sat in on one of their "how can we tarnish the AB brand" meetings. It was quite enlightening!

matguy70 · PostDec 31, 2008#6632008-12-31T17:44+00:00

Anheuser-Busch InBev: Poised to Rebound After 85% Collapse

GOTO:

http://seekingalpha.com/article/112737- ... 5-collapse

the central scrutinizer · PostDec 31, 2008#6642008-12-31T20:42+00:00

matguy70 wrote:Anheuser-Busch InBev: Poised to Rebound After 85% Collapse

GOTO:

http://seekingalpha.com/article/112737- ... 5-collapse

I'll pass, for now. This guy focuses way to much on EBITDA. EBITDA is useless, from the point of view of an investor.

Here is what some other people have to say on the subject:

"References to EBITDA make us shudder. Too many investors focus on earnings before interest, taxes, depreciation and amortization. That makes sense, only if you think capital expenditures are funded by the tooth fairy." - Warren Buffett

"Among those who talk about EBITDA and those who don't, there are more frauds among those who do. Either they are trying to con you, or they're conning themselves." - Warren Buffett

"If you want to know what FedEx is worth, look at what's left after it has paid for trucks and airplanes, not before. " - Steve Hanke, Forbes Magazine

"Depreciation is a real cost but people were encouraged not to think that by investment bankers who wanted them to talk about EBITDA. Why not put all expenses in the footnotes, just put in sales and say that equals profits? EBITDA is a term that has lost investors a lot of money." - Warren Buffett

"Wherever you read EBITDA, you should substitute it with 'bullsh*t earnings'. " - Charlie Munger

debaliviere · PostDec 31, 2008#6652008-12-31T20:49+00:00

^

The first and last guy are certainly good enough for me.

jcity · PostJan 02, 2009#6662009-01-02T01:55+00:00

don't mean to be bitter about it, that's just my perception, and those of people I know that work there. i hope to be proven wrong, trust me. we'll analyze it a few years from now.

zink · PostJan 02, 2009#6672009-01-02T14:09+00:00

I agree, I can definitely see this Inbev turning into a mirror image of what Macy's did. And we all know how fantastic Macy's is now...

stlterp · PostJan 02, 2009#6682009-01-02T18:17+00:00

Well, since Macy's went from several thousand employees in the REB when it was May/MMC/Famous to about 800 with Macy's Midwest to <100 today...

threeonefour · PostJan 02, 2009#6692009-01-02T18:53+00:00

I worry about the long-term presence of Anheuser-Busch, Inc. being diminished just because the so-called commitment to St. Louis is the same song and dance we've heard when other major local corporations like May Company and Trans World Airlines were gobbled up by Macy's and American Airlines respectively.

That said, I think it's a bit of an apples-to-oranges comparison since we're essentially left with a continental headquarters for a global company instead of a regional office for a corporation that primarily does business in the United States. The same could be said for Nissan's North American headquarters in Nashville, although that may not be the best example since Nissan relocated there from suburban Los Angeles (Gardena, Calif.) a few years ago.

With that in mind, the challenge as I see it is to ensure that Anheuser-Busch InBev leadership understands the advantages of a strong continental headquarters in St. Louis. Even with the recently announced cuts there will still be a significant presence here, and then when St. Louis' central location and cost of living are factored in it makes sense for AB InBev to retain a major presence in St. Louis over the long haul. My only concern is the company's long-term profitability. We know under Carlos Brito that AB InBev has strategically acquired companies and trimmed the fat in the process, but where will the company go from here?

While that remains to be seen, I still think we're looking at a different situation than we've seen in the past when other local corporate giants were swallowed by out-of-town corporations, so I'm inclined to be a bit more optimistic this time around. Only time will tell I suppose...

DogtownBnR · PostJan 06, 2009#6702009-01-06T14:42+00:00

No more free beer at Busch theme parks...just the tip of the iceberg. Seems logical, but why now..why not wait until that piece of the business is sold. Is this really going to save INBEV that much money. Just wait, Grants Farm is next, breweries to follow.

http://stlouis.bizjournals.com/stlouis/ ... aily5.html

the central scrutinizer · PostJan 06, 2009#6712009-01-06T14:48+00:00

DOGTOWNB&R wrote:No more free beer at Busch theme parks...just the tip of the iceberg. Seems logical, but why now..why not wait until that piece of the business is sold.

You're assuming it's going to be sold.

DOGTOWNB&R wrote:Is this really going to save INBEV that much money.

There is no cost cutting measure they can implement that will magically save $10 billion per year. All the low hanging fruit has already been picked. So everything from here on it is a million here, a million there.

DOGTOWNB&R wrote:Just wait, Grants Farm is next...

They can't sell what they don't own.

DOGTOWNB&R wrote:...breweries to follow.

Ummmm....yeah. And where do you propose they brew the beer? In a bathtub?

DogtownBnR · PostJan 06, 2009#6722009-01-06T16:03+00:00

You're assuming it's going to be sold.

Eventually

There is no cost cutting measure they can implement that will magically save $10 billion per year. All the low hanging fruit has already been picked. So everything from here on it is a million here, a million there.

Many employees are still hanging pretty low, not $10 billion worth, but there are plenty more people they can cut.

They can't sell what they don't own.

Good point, my mistake

Ummmm....yeah. And where do you propose they brew the beer? In a bathtub?

Meant no more free beer at the breweries,tours specifically, not closing breweries.....

dweebe · PostJan 06, 2009#6732009-01-06T16:09+00:00

The Central Scrutinizer wrote:
DOGTOWNB&R wrote:No more free beer at Busch theme parks...just the tip of the iceberg. Seems logical, but why now..why not wait until that piece of the business is sold.

You're assuming it's going to be sold.

DOGTOWNB&R wrote:Is this really going to save INBEV that much money.

There is no cost cutting measure they can implement that will magically save $10 billion per year. All the low hanging fruit has already been picked. So everything from here on it is a million here, a million there.

DOGTOWNB&R wrote:Just wait, Grants Farm is next...

They can't sell what they don't own.

DOGTOWNB&R wrote:...breweries to follow.

Ummmm....yeah. And where do you propose they brew the beer? In a bathtub?

Selling theme parks: CS is right. It will be hard for InBev to dump the themeparks in this economy. People don't have the discretionary income to spend $45/person to see Shamu III and buy their kids $8 sodas or $10 popcorns.

Grant's Farm: who does own Grant's Farm? Is it still in the family? Besides, who's going to have the money to buy Grants Farm, tear it down and build a bunch of McMansions?

DogtownBnR · PostJan 06, 2009#6742009-01-06T16:13+00:00

Selling theme parks: CS is right. It will be hard for InBev to dump the themeparks in this economy. People don't have the discretionary income to spend $45/person to see Shamu III and buy their kids $8 sodas or $10 popcorns.

Like I said ......eventually...gone!!

GF is apparently owned by the Busch family if wiki is correct...

http://en.wikipedia.org/wiki/Grant's_Farm

dweebe · PostJan 06, 2009#6752009-01-06T16:20+00:00

The Central Scrutinizer wrote:

DOGTOWNB&R wrote:...breweries to follow.

Ummmm....yeah. And where do you propose they brew the beer? In a bathtub?

Maybe InBev will close or sell of one of the older/more inefficient/highest cost breweries? Just to put the Fear of God in the survivors and light a fire under their backsides to find other ways to cut costs. Just to make an example of someone?

Anheuser-Busch InBev Thread

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