Shares in brewer AB InBev suspended after Altria stake sale plan

LONDON (Reuters) -Anheuser-Busch InBev’s shares have been suspended from buying and selling on Thursday on the request of Belgium’s Monetary Companies and Markets Authority (FSMA) following the information tobacco big Altria would promote down its stake within the brewer.

The U.S. cigarette maker mentioned on Wednesday it could minimize its round 10% stake on the planet’s high beer maker, promoting round 35 million shares or round a fifth of its whole holding. AB InBev plans to purchase again $200 million value of shares.

AB InBev mentioned in its accompanying assertion on Wednesday that the FSMA had requested a suspension of buying and selling on Thursday till the publication of a press launch on pricing anticipated in a while that day.

“We stay disciplined in our capital allocation selections and collaborating on this providing is per our technique,” AB InBev CEO Michel Doukeris added.

James Edwardes Jones, analyst at RBC Capital Markets, mentioned it was unsurprising Altria was promoting down its holding in AB InBev.

“On stability, we really feel that that is more likely to act as a short-term brake on ABI’s share value however is of minimal longer-term significance,” he mentioned in a observe.

Altria acquired money and a stake in AB InBev in return for its holding in SABMiller when AB InBev acquired the African beer maker in 2016. The tobacco firm additionally added to its stake within the mixed brewer round that point.

In 2016, AB InBev persistently traded at over $120 per share and typically as excessive as $130 per share. It has been in regular decline since and traded for simply over $64 per share on Wednesday.

Callum Elliott, analyst at Bernstein, mentioned that because the earnings generated by its stake has declined, Altria has shifted from viewing it as “strategic” to a “monetary funding”.

The tobacco firm needs to make use of the proceeds from the sale to fund further buybacks of its personal inventory.

(Reporting by Emma Rumney; enhancing by Jason Neely and Elaine Hardcastle)