LONDON (Reuters) – Anheuser-Busch InBev shares were suspended from trading on Thursday at the request of Belgium's Financial Services and Markets Authority (FSMA) following news that tobacco giant Altria would sell its stake in the brewery.
The American cigarette maker said on Wednesday that it would reduce its stake of about 10% in the world's largest beer maker, selling about 35 million shares, or about a fifth of its total stake. AB InBev plans to buy back $200 million worth of stock.
AB InBev said in its accompanying statement on Wednesday that the FSMA had requested a suspension of trading on Thursday until the publication of a press release on prices expected later that day.
“We remain disciplined in our capital allocation decisions, and participating in this offering is consistent with our strategy,” added Michel Dockeris, CEO of AB InBev.
James Edwards-Jones, an analyst at RBC Capital Markets, said it was a surprise that Altria would sell its stake in AB InBev.
“Overall, we feel this is likely to act as a short-term brake on ABI's share price but is of little significance in the long term,” he said in a note.
Altria received cash and a stake in AB InBev for its holding in SABMiller when AB InBev acquired the African brewer in 2016. The tobacco company also added to its stake in the combined brewery around that time.
In 2016, AB InBev consistently traded at over $120 per share and sometimes as high as $130 per share. It has been on a steady decline since then and was trading at just over $64 a share on Wednesday.
With the decline in income from its stake, Altria has shifted from being seen as a “strategic” to a “financial investment,” said Calum Elliott, an analyst at Bernstein.
The tobacco company wants to use the proceeds from the sale to fund additional buybacks of its shares.
(Reporting by Emma Romney; Editing by Jason Neely and Elaine Hardcastle)
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