June 27 (Bloomberg) -- InBev NV, the Belgian brewer pursuing a takeover of Anheuser-Busch Cos., may have to offer an additional $7 billion to persuade the U.S. company's board to sell.

Anheuser-Busch, the St. Louis-based maker of Budweiser beer, rejected InBev's $46.3 billion proposal yesterday as ``financially inadequate'' and kept the door open for a higher offer or another suitor.

While InBev said yesterday it planned to ask shareholders to fire Anheuser's board, the brewer of Stella Artois and Beck's may instead boost its bid to $75 a share from $65 to avoid a fight, said Malcolm Polley, president of Stewart Capital Advisors LLC. A transaction at that price would be valued at $53.5 billion.

``We've entered into hostile territory,'' said Tom Pirko, president of Bevmark LLC, a consulting firm in Buellton, California. ``InBev is a very aggressive company. They don't take no for an answer.'' Pirko, whose firm has analyzed the beverage industry for 30 years, also said InBev may offer $75 a share.

Nina Devlin, an InBev spokeswoman who works for Brunswick Group, declined to comment. Anheuser-Busch spokeswomen Brenda Williams, Terri Vogt and Kelli Powers didn't return phone messages or e-mails seeking comment.

Anheuser-Busch's German shares rose 4 cents to $61.39 at 2:52 p.m. in Frankfurt today. InBev fell 86 cents, or 1.9 percent, to 44.14 euros in Brussels.

`More Brutal'

Should InBev pay any more than $65 a share the brewer ``will have to be more brutal with cost cuts,'' said Landsbanki Kepler analyst Marcel Hooijmaijers. ``That's what Anheuser-Busch doesn't want, so there's a bit of a dilemma there.''

At the current offer price, InBev would take between three and five years to recoup its investment, Hooijmaijers said. At $70-a-share, that may take seven or eight years, and a $75 bid could take as long as 10 years to pay off, depending on the extent of cost reductions, according to the analyst.

The damage to earnings per share from a higher bid depends on how much additional financing InBev is able to secure from the debt market, as opposed to issuing more equity, analysts said.

Petercam SA's Kris Kippers says the current offer would increase earnings per share by 7 percent in 2009. A $70 bid may lead to a 1 percent reduction by that measure, and at $75, the decline would be 10 percent, according to the analyst.

InBev is offering about 10 times Anheuser's 2009 earnings before interest, taxes depreciation and amortization, Kippers said. This would increase to 11.5 times at $75-a-share.

U.S., China

SABMiller Plc, the world's third-largest brewer, paid about 14 times Ebitda for Royal Grolsch NV last year, Kippers said.

Leuven, Belgium-based InBev is seeking control of half of the U.S. beer market and growth in China, where Anheuser-Busch owns 27 percent of Tsingtao Brewery Co., the country's second- biggest brewer. InBev, the product of a combination between Interbrew SA and Sao Paulo-based Cia. de Bebidas das Americas four years ago, is the biggest beermaker in Latin America.

Some members of the Busch family, which has run Anheuser- Busch over five generations, want the brewer kept independent.

Chief Executive Officer August A. Busch IV told InBev before it put a proposal in writing that his company wasn't for sale, and that ``he and his board are `committed' to remain independent,'' the Belgian brewer said yesterday in a filing in a Wilmington, Delaware, court. InBev asked a court to rule that shareholders can remove all 13 members of Anheuser-Busch's board by written consent at the same time.

``We feel this is unlikely, but a timely reminder to Anheuser-Busch,'' Carlos Laboy, an analyst at Credit Suisse Holdings USA in New York, wrote in a note today.

Capitulation at $67?

Colin Symons, whose Pittsburgh-based Symons Capital Management Inc. manages $325 million in assets, said Anheuser- Busch might still accept as little as $67 a share, or $47.8 billion, should it become clear that InBev can successfully lobby shareholders to tender their stock.

A price of $67 ``would probably assuage the feelings of everybody,'' Symons said. His Symons Alpha Value Institutional Fund is down less than 1 percent this year, outperforming 96 percent of its peers, according to data compiled by Bloomberg.

Anheuser-Busch's rejection of the offer yesterday was the board's first response since InBev made its unsolicited proposal on June 11. InBev said it preferred a friendly combination of its Bass, Beck's and Stella Artois with Budweiser, while still pursuing an ouster of the board.

Third Letter

While Busch told distributors in April that the company wouldn't be sold while he was in charge, the family doesn't own enough shares to sway a shareholder vote on the board. Directors and executives hold 4.5 percent of the company's shares, according to a regulatory filing earlier this year.

Anheuser-Busch may announce plans to lower costs and sell off divisions to increase its stock price so it doesn't need to be acquired, the Wall Street Journal reported this week. It may still entertain other offers that are high enough for the board.

``The board is open to consider any proposal that would provide full and certain value to Anheuser-Busch shareholders,'' the company said in a statement.

InBev wrote to Anheuser-Busch for a third time June 25 to request takeover talks, and said it paid lenders $50 million to get financing commitments for its offer. The brewer told August Busch IV that the fees have been paid to banks backing the bid.

``Anheuser-Busch has to be willing to let InBev in and to see the books,'' Stewart Capital's Polley, who oversees $1 billion in assets, said yesterday in a Bloomberg Television interview from Indiana, Pennsylvania. ``If they can show them how they can get there, then I think $75 is doable.''

The case where InBev asked for a ruling confirming investors' right to oust Anheuser's board is: InBev NV/SA v. Anheuser-Busch Companies Inc., CA3857, Delaware Chancery Court (Wilmington.)

To contact the reporters on this story: Duane D. Stanford in Atlanta at dstanford2@bloomberg.net; Loveday Morris in London at lmorris7@bloomberg.net.

Last Updated: June 27, 2008 08:57 EDT