June 26 (Bloomberg) -- Anheuser-Busch Cos., the biggest U.S. brewer, may reject InBev NV's $46.3 billion takeover bid and announce plans to lower costs and sell off divisions to increase its stock price.

The maker of Budweiser may say this week that the $65-a- share bid from InBev, the world's largest brewer, is inadequate, the Wall Street Journal reported yesterday, citing unidentified people familiar with the matter. Anheuser may also say it plans to cut $1 billion in costs over four years, pay a special dividend and consider selling its theme-park unit.

An Anheuser-Busch decision to fight InBev would raise the possibility of a higher bid. A takeover of the St. Louis-based beermaker would be the second-biggest purchase of a consumer company and put Leuven, Belgium-based InBev's Stella Artois and Beck's together with Budweiser, first brewed 132 years ago.

``If a deal is ever going to take place, InBev will have to raise the price,'' said Marvin Roffman, president of Roffman Miller Associates in Philadelphia. He said Anheuser-Busch's board probably won't consider anything less than $75 a share.

InBev spokeswoman Marianne Amssoms said today the $65-a- share offer is ``full and fair'' and declined to comment on the Journal report. The purchase would be the biggest consumer-goods takeover since Procter & Gamble Co. bought Gillette Co. for $57 billion in 2005, as well as the biggest cash bid on record.

InBev Drops

``We're probably headed for a proxy fight,'' said Doug Peta, market strategist at J&W Seligman & Co. Inc., said in a Bloomberg Television interview.

InBev declined 1.45 euros, or 3.1 percent, to 44.85 euros at 1:56 p.m. in Brussels, tracking a 2 percent drop by the pan- European Dow Jones Stoxx 600 Index today. The brewer may have sell additional equity for cash to sweeten its offer, according to Kris Kippers, an analyst at Petercam SA in Brussels.

Anheuser-Busch's German shares traded at the equivalent of $61.50 in Frankfurt, 0.4 percent below yesterday's close of $61.76 in New York. Anheuser-Busch spokeswomen Brenda Williams, Terri Vogt and Kelli Powers didn't return phone messages or e- mails seeking comment.

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

`Constructive Dialogue'

``We are committed to entering into a constructive dialogue with you to achieve a friendly combination,'' InBev CEO Carlos Brito said in his letter. He reiterated that InBev wouldn't close any U.S. breweries and would keep the combined company's headquarters in St. Louis.

``They're going to extra lengths to show they have the cash,'' said Pilar Gomez-Bravo, a portfolio manager at Lehman Brothers Asset Management in London. ``In the context of the credit crunch, it's not surprising InBev would want to show they have the support of their banks, particularly given the size of the financing.''

Roffman, who manages $380 million and held 85,470 Anheuser shares as of March 31, said InBev probably won't raise its bid and any deal will ultimately be thwarted by the U.S. company's management.

Higher Bid?

Analysts have said InBev may raise its offer to $73 a share. The Belgian brewer's executives, who are partly paid in stock, may be unwilling to bid more than $70 a share, said Trevor Stirling, an analyst at Sanford C. Bernstein in London.

``They will be reluctant to pay more of `their own' money than is absolutely necessary or prudent,'' he said in a June 13 research note. Half of the 3.4 million-euro ($5.3 million) bonus paid to CEO Brito last year was settled in InBev shares to be held for three years.

The Belgian brewer ``will be prepared'' to make a hostile bid if its offer is rejected, Wim Hoste, an analyst at KBC Securities in Brussels, wrote today in a research report.

August Busch IV and his relatives don't have a big enough stake to block InBev in a shareholder vote. Anheuser executives and directors, including non-family members, control 4.5 percent of the stock, a March filing shows. Busch told distributors in April that no sale would happen ``on my watch.''

Andrew D. Busch, an uncle of the Anheuser CEO, said on June 21 that he wants the U.S. brewer to remain based in St. Louis and continue as a ``strong company.'' Another uncle, Adolphus Busch IV, urged Anheuser's board to accept the proposal.

Buffett Stake

Pressure to consider InBev's offer may come from Warren Buffett, whose Berkshire Hathaway Inc. owned 35.6 million shares, or 5 percent, of Anheuser-Busch as of March 31. That makes him the second-largest stockholder after Barclays Plc, which owned 6.1 percent, data compiled by Bloomberg shows.

Anheuser-Busch's theme parks might fetch $2.9 billion, Petercam's Kippers has said. Busch Entertainment Corp. owns 10 sites across the U.S. including Busch Gardens and Seaworld and plans to open four parks in Dubai. The unit's revenue of $1.3 billion last year was 7 percent of Anheuser-Busch's total.

Buffett said in an interview yesterday he hadn't spoken with Anheuser-Busch about the takeover offer, and declined to say if he supports a transaction.

InBev, which traces its roots to 1366, took its current form in 2004 when Leuven-based Interbrew SA bought Sao Paulo- based Cia. de Bebidas das Americas, or AmBev, in an $11 billion transaction.

Brazilian Leaders

In less than two years, Interbrew's American CEO was replaced by Brito, a Brazilian groomed by Jorge Paulo Lemann and two other Brazilian bankers who had built AmBev from a brewer they acquired in 1989. Since the merger, InBev's earnings before interest, taxes, depreciation and amortization as a percentage of sales have increased to 35 percent from 25 percent.

InBev may have trouble lowering costs given potential resistance from Anheuser-Busch's unions and the low market overlap between the two companies, according to Wachovia Securities Inc. analyst Jonathan Feeney.

The Belgian company hired Lazard Ltd. and JPMorgan Chase & Co. as financial advisers.

InBev's lenders for the proposed bid are Banco Santander SA, Deutsche Bank AG, Barclays Capital, JPMorgan, Royal Bank of Scotland Group Plc, BNP Paribas SA, Fortis, ING Groep NV, Bank of Tokyo-Mitsubishi UFJ and Mizuho Corporate Bank Ltd.

To contact the reporter on this story: Duane D. Stanford in Atlanta dstanford2@bloomberg.net; Amy Wilson in London at awilson23@bloomberg.net.

Last Updated: June 26, 2008 08:47 EDT