Although the majority of SAB Miller’s shareholders is clearly in favor of the takeover through AB InBev, the deal could fail because of special conditions of the transaction and the ownership structure. In order to approve the deal, SAB Miller needs a majority of 75% of all shares.
The two largest shareholders, Altria Group (26,51%) und Bevco LLC (13,87%), a company of Columbia’s Santo Domingo family, represent together a combined stake of roughly 40% in the business. They are excluded from voting because they negotiated a special deal with AB InBev.
20% of all SAB Miller shares, which represent therefore one third of the remaining stocks, are controlled by the three hedge funds Elliott Management Corp., Davidson Kempner Capital Management LLC and TCI Fund Management Ltd. through derivatives and stock options. The shares do not have voting rights unless they are converted into voting shares. This causes 0.5% tax, or a total of about £73 million ($95 million). If the mentioned funds prefer to avoid the tax payment, only 40% of all share votes will decide on the deal and 10% could stop the deal at SABMiller’s general meeting on Sept. 28.