Exane says SABMiller now 'in play', ABInBev bid possible

SABMiller is a "key M&A play", according to analysts at Exane BNP Paribas, who said "it's now or never for a bid" for the company from Dutch brewing giant Anheuser-Busch InBev.

The broker, which started coverage of SABMiller with an 'outperform' recommendation, said: "Now is arguably the best time for ABI to finance a bid on SAB, courtesy of bond and FX markets.

"Despite limited synergies and execution risk, a deal would boost earnings per share (EPS) and more importantly, help solve ABI's volume issue. Tempting. If a deal doesn't happen soon, it may never happen," it said.

Nevertheless, Exane also said that SABMiller is being closely watched by investors "not only as a prey".

The brewer is "keen to spend", and wine, beer and soft drinks group Castel is their best and last large option.

"The least reliant on M&A in the past, SABMiller seem keen to spend money (likely for offensive and defensive reasons). Only one target is both accretive to volume, top line and EPS growth and large enough to ward off ABI: Castel. The only question is: can SAB get its hands on it?"

The broker set a 4,000p target price for SABMiller, which was up 2% at 3,640.5p before the close.