CVC puts more equity into ABInBev bid

Private equity firm CVC Capital Partners has put more equity into its bid for Anheuser-Busch InBev’s central and eastern European assets, two bankers close to the deal said on Friday.

CVC has lifted its equity contribution to 60-65% of the anticipated €1.4bn purchase price to clinch the sale, which is expected in the next two weeks, the bankers said.

“The price has gone up through the process to make the deal happen. CVC has put in more equity and the debt financing remains the same,” one banker said.

The move boosts CVC’s contribution to €840m or more from a standard 50% contribution of €700m, the bankers said.

CVC was not immediately available for comment.

ABInBev, brewer of Budweiser, Stella and Beck’s has said it wants US$7bn from divestments to repay US$45bn of loans for InBev’s US$52bn takeover last year of U.S. brewer Anheuser-Busch.

The sale is expected to be financed with a €700m leveraged loan and a vendor note from ABInBev, which will allow CVC to defer some of the purchase price until a later date.

CVC’s increased equity contribution also decreases leverage on the loan to less than three times, the banker said, which makes the financing more attractive to prospective investors.

Around 12 banks committed to an all-senior financing with no junior debt at the end of July backing CVC’s bid for 11 breweries in seven countries, several bankers said.

The loan will be priced at around 500 to 600 basis points, a banker said, and is expected to be held by the club of banks, with the possible addition of a couple of new lenders.