DEALTALK - InBev's higher offer likely to get deal done

By Jui Chakravorty Das and Aarthi Sivaraman Guruprasad

NEW YORK (Reuters) - They've called each other names. They've slung mud at each other. One has tried to oust the other's board. But you might expect the two to pop open a can of beer to celebrate a merger. Soon.

According to media reports, InBev has raised its offer price to buy Anheuser-Busch to $70 a share from the $65 it had originally offered -- which Anheuser spurned two weeks ago, saying it "substantially undervalues" the company.

InBev responded by seeking to oust the American brewer's board, while Anheuser accused the Belgian-Brazilian brewer of lying about its financing commitments and even criticized it for having operations in Cuba.

But two weeks later, with an offer that has gone from $46.3 billion (23.3 billion pounds) to $49.9 billion, things have gone from not-so-friendly to friendly.

The two parties are said to be in talks now with an offer of $70 a share on the table, reflecting a premium of about 33 percent from Anheuser's closing price on May 22, a day before the rumours of the takeover surfaced.

The new offer -- neither too frothy nor too flat -- makes for a compelling case for the board to recommend the deal.

Joel Greenberg, a partner at law firm Kaye Scholer, declined to comment on this specific deal but said: "Typically shareholders will accept a price recommended by the board. Once a deal goes friendly, it's very likely the board recommends it."

According to the New York Times, some of Anheuser's largest shareholders, including Warren Buffet -- who owns a 5-percent stake in the brewer -- are already leaning towards backing the deal with InBev.