Anheuser Formally Rejects Offer From Belgian Brewer

A battle for control of America's favorite beer began in earnest today as the Budweiser brewer Anheuser-Busch flatly rejected a $46bn takeover offer from Belgium's InBev as "financially inadequate".

In its first formal response since InBev mooted a deal two weeks ago, Anheuser insisted that it could do better independently as the owner of the best-selling brand in the world's most profitable beer market.

Anheuser's chairman, Patrick Stokes, said: "The proposed price does not reflect the strength of Anheuser-Busch's global, iconic brands Bud Light and Budweiser, the top two selling beer brands in the world."

The defiant response came just hours after InBev said it was filing a lawsuit in Delaware to clarify the St Louis-based company's corporate structure.

In a sign of its intention to wage a hostile battle, it wants a judge to rule that all 13 of Anheuser's directors are liable to removal through a vote by shareholders – including five recently elected board members.

The prospect of a takeover has sparked anxiety in Anheuser's home state. The governor of Missouri, Matt Blunt, has vowed to do everything he can to prevent the company from being taken over and a "Save Budweiser" online petition has attracted 57,000 electronic signatures.

To fend of InBev's offer of $65 a share, Anheuser will have to show how it can boost its present share price which dropped 40 cents today to $61.36.

In a letter to his counterpart at Inbev, the Anheuser chief executive August Busch said that a productivity program called Blue Ocean would yield $750m savings next year and $1bn in 2010.

He accused the Belgian firm of "opportunistic timing" in taking advantage of the weak dollar and sluggish US stockmarket.

"As you say yourself, you dream big," wrote Busch, whose great-great grandfather founded Anheuser. "We respect your desires to grow your company. But your growth should not come at the expense of our stockholders."

Reports in the US media have suggested that to boost its share price, Anheuser could sell non-core assets such as its entertainment business which operates ten theme parks in the US and is building another, the World of Discovery, on the Palm development off the coast of Dubai.

Mark Swartzberg, a beverages analyst at Stifel Nicolaus, said Anheuser's cost cutting plans were unlikely to be sufficient to take its share price above the level of InBev's offer. In a note to clients, he wrote: "We believe shareholders are likely to ultimately choose InBev's offer over AB's plans."