Thursday, June 12, 2008
Tough Decision
The CEO of brewer, Anheuser-Busch, faces a tough decision. The company has always been dominated by one family, even though it is publicly held. The family has over many decades reinforced the perception that it is a family company. Now comes an all-cash bid to shareholders that will be hard for the family to turn down. It will be interesting if the family goes quietly or if it decides to mount a communications defense. Either way, the CEO is under pressure. Do what is best for shareholders or do what is best for the family?
There is always a risk in maintaining dated perceptions. If the Busch family were the dominant shareholder with voting control, then carrying on family tradition makes sense. It is my understanding, however, that the family no longer holds a majority of the shares. The question arises, then, whether the family should have changed perceptions and communicated a more accurate picture of what the company is. It will become clear as this merger offers unfolds. Either way, the perception of the company will never be the same again.
There is always a risk in maintaining dated perceptions. If the Busch family were the dominant shareholder with voting control, then carrying on family tradition makes sense. It is my understanding, however, that the family no longer holds a majority of the shares. The question arises, then, whether the family should have changed perceptions and communicated a more accurate picture of what the company is. It will become clear as this merger offers unfolds. Either way, the perception of the company will never be the same again.
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