Cindy McCain could make big bucks from Anheuser-Busch deal

Cindy McCain could make big bucks from Anheuser-Busch deal
By Carol Eisenberg
June 18, 2008 at 10:06am

When the presumptive Republican nominee John McCain said last week that he would veto "every single beer - bill with earmarks," it seemed more than a mere slip of the tongue.

Map to explore connections:
http://www.muckety.com/876AE8A95E9F53AE2BC567382F44D017.map?autoGroup=7,7&big=true

A lot of the McCains' personal fortune, after all, rides on beer - particularly on the fortunes of Anheuser-Busch Companies, Inc., the St. Louis-based U.S. beer-maker, which is the target of an unsolicited takeover bid by InBev, the Belgian-Brazilian maker of Stella Artois, Beck's and Bass beers.

McCain's wife, Cindy Hensley McCain, and her children, own more than $1 million worth of stock in Anheuser-Busch, according to McCain's most recent financial disclosure report.

Carlos Brito, the chief executive of InBev, is offering $65 a share in cash to the shareholders of Anheuser-Busch - a 35-percent premium over Anheuser-Busch's 30-day average share price - an enticement that would make a pot-load of money for the Arizona senator's wife and children, as well as for other big investors, such as Warren Buffett.

(The exact size of the profit for the McCains cannot be determined because their disclosure report lists only a general range of values for their assets, and they chose "over $1 million" for their Anheuser-Busch stock, with no elaboration.)

Despite the growing political storm over the loss of a so-called iconic American brand, McCain has declined to publicly comment on the prospective deal, which would create the world's largest brewer with distribution channels around the globe.

But according to Belgium's newspaper, De Standaard, Warren Buffett came out full square om support of it yesterday, and said he was scheduled to meet with the company's chief executive, August Anheuser Busch IV, although the paper did not indicate the source of that information.

There might be other implications, however, for Cindy McCain. In addition to being an Anheuser-Busch shareholder, she is the chairman of Phoenix-based beer distributorship Hensley & Co., co-foundeded by her father, James Hensley. The company happens to be the third largest wholesaler of Anheuser-Busch in the U.S.

Hensley & Co.'s annual sales are estimated $300 million or more by beverage industry analysts, and its relationship with Anheuser-Busch is reportedly tight. In return for helping the brewer keep its products widely stocked, independent distributors like Hensley & Co. rely on the beer-maker for a steady stream of products and billion-dollar advertising campaigns.

Andrew Ross Sorkin wrote in his Dealbook column in The New York Times yesterday that despite the company's avowals that it "will evaluate the proposal carefully," its leadership, including the 41-year-old Busch IV, his father, August A. Busch III, and many directors, are already preparing to fight the offer.

He said that Busch IV reportedly told a meeting of beer distributors in Chicago in April, when rumors about a takeover bid were already swirling, "that no sale would happen ?'on my watch.' "

"Anheuser-Busch hired Goldman Sachs before the InBev bid was formally made, along with Citigroup, and both banks have been working overtime to build ?'fantasy' models that show the company is worth much more than InBev's offer." Sorkin wrote.

Sorkin also says that Anheuser-Busch's board has so many Busch family members that some of its independent directors - which include Edward Whitacre Jr., the former chairman of AT&T - have explored the possibility of hiring their own lawyers to get independent advice.

Whether as a result of pressure from the company or from constituents who make up the beer-maker's 30,000-member workforce (with 6,000 in St. Louis), Missouri lawmakers are lining up against the deal, although there is little indication they have the power to stop it.

The Busches have supported both political parties over the years. While former CEO Busch III is a big contributor to the Republican party and to John McCain, his son, CEO Busch IV, leans Democratic.

Missouri Sen. Claire McCaskill vowed Tuesday to do everything in her power to thwart InBev - a day after Missouri Gov. Matt Blunt asked the Federal Trade Commission to determine if the proposed acquisition would be anticompetitive.

Blunt has also asked Missouri regulators to see if there is anything that can be done at the state level to derail the deal. Missouri's Republican senator, Kit Bond, sent his own query to the FTC and to Attorney General Michael Mukasey requesting close scrutiny of the deal.

In an open letter to the people of St. Louis Tuesday, which attempted to allay anxieties about the proposal, Brito said that InBev has no plans to close any U.S. breweries, and would commit to keeping the company's North American headquarters in St. Louis.