June 27 (Bloomberg) -- Anheuser-Busch Cos., moving to placate investors after rejecting InBev NV's $46.3 billion hostile takeover bid, plans to boost its stock by cutting as much as $1 billion in annual costs and buying back more shares.

The biggest U.S. beermaker forecast 2008 earnings that may rise the most in six years, Chief Financial Officer Randolph Baker said on a conference call today, sending the shares up as much as 2.4 percent in New York trading.

The board ``found InBev's proposal too low,'' Chief Executive Officer August A. Busch IV said during the call. ``The value InBev claims to offer in proposing $65 per share assumes cost reductions Anheuser-Busch can achieve independently.''

Anheuser-Busch announced the plans more than two weeks after InBev unveiled its offer, which would unite Budweiser beer with Stella Artois, Beck's and Bass. The rejection may mean InBev will increase its bid by $7 billion, or to $75 a share, 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.

InBev will study Anheuser-Busch's response, spokeswoman Marianne Amssoms, reiterated that the brewer's offer was ``full'' and ``fair.''

Anheuser-Busch, based in St. Louis, gained 91 cents, or 1.5 percent, to $62.26 at 4:15 p.m. in New York Stock Exchange composite trading. InBev fell 86 cents, or 1.9 percent, to 44.14 euros in Brussels, the lowest since October 2006.

Earnings Forecast

Earnings per share in 2008 may rise 13 percent to $3.13, and jump 25 percent to $3.90 next year, Baker said on the call. Eleven analysts surveyed by Bloomberg estimated average profit of $3.02 a share in 2008. Twelve predicted profit of $3.30 in 2009.

Anheuser-Busch will increase its share buyback goal for 2008 to $3 billion from $2 billion, Baker said. It plans to repurchase another $4 billion of shares in 2009.

The brewer will also cut its salaried workforce 10 percent to 15 percent, or as many as 1,290 jobs, through an early retirement program, he said.

August Busch IV told InBev before the Belgian brewer put its proposal in writing that his company wasn't for sale, and that ``he and his board are `committed' to remain independent,'' InBev 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.

Busch said today that Anheuser-Busch will challenge InBev on the matter.

Family Opposition

While the CEO told distributors in April that the company wouldn't be sold while he was in charge, the family, which has run Anheuser-Busch for five generations, 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.

``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 yesterday.

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.

`Hostile Territory'

``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.

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

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

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.

Grolsch Purchase

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.

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.

First Response

Anheuser-Busch's rejection of the offer yesterday was the board's first response since InBev made its unsolicited proposal on June 11.

``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;

Last Updated: June 27, 2008 16:33 EDT