Patience is rewarded!!!! 

As you know, the Ultimate Stock-Picker's portfolio has had a position in St. Louis beer maker Anheuser-Busch for some time now.  Some have said the stock has looked like a value trap, but with InBev's rumored $65 bid for the company coming to fruition yesterday, Anheuser's now in play, and it stock has shot up.  As my colleague Ann Gilpin has stated, it will be very hard for the board to reject the offer as it will likely be difficult for current management to create $65 of value for shareholders in the near term.  I expect some type of deal to go through, and I'll likely recycle the capital presently in Anheuser into a higher expected return idea sometime next week.  Be sure to check out my most recent watch list for my list of new ideas, and stay tuned for a transaction.

Also, I've included a copy of Ann Gilpin's analyst note below for your referenence:

American beer giant Anheuser-Busch BUD confirmed Wednesday that it had received an unsolicited takeover offer from Belgium-based InBev for $65 per share in cash. This represents a 14% premium to our previous fair value estimate and would change the global beer industry forever. We are placing A-B under review while we weigh the possible outcomes of this offer.

The board of directors will be under a tremendous amount of pressure to accept the offer. First of all, it will be very difficult for the board to convince shareholders it can create $65 per share of value on its own. A-B's share price has been flat for years, reaching an all-time high of just $54.97 in October 2002. From shareholders' point of view, A-B has had plenty of time to improve performance and lift the stock price, and management hasn't delivered. Second, we doubt A-B will be able to generate a competing bid. A $46 billion deal is a large pill to swallow, and Diageo DEO and SABMiller SBMRY are the only alcohol companies in the world that could do it. In our opinion, A-B doesn't fit Diageo's growth or premium profile, and a merger of A-B and SABMiller wouldn't get past U.S. regulators.

However, given that Busch family members sit on the board and have a vested interest in maintaining the legacy of the company, it is quite possible that A-B could take action to fend off InBev. For example, A-B could take on additional debt and pay out a special dividend to appease the disgruntled shareholder base, meanwhile making the company more expensive to purchase. Or A-B could purchase the remaining equity of Grupo Modelo.

That being said, InBev has its own negotiation tactics. It could take the offer directly to shareholders, who we think would happily take the $65 and wipe their hands clean of the company. Also, it is widely believed that InBev has a plan B that it could leverage against the A-B board: merging with SABMiller. Such a merger would effectively shut A-B out of the international market and put more heat on competition at home, which A-B wouldn't want to see happen. Conversely, SABMiller has a vested interest in blocking a merger of A-B and InBev, as the new company would control 25% of the world's beer market and be an unstoppable global powerhouse. It is widely believed that SABMiller has quietly offered itself for GBX 1,500 per share.

It is highly uncertain at this point whether the board will accept InBev's offer or try to make A-B more expensive to purchase, or whether there will be a hostile takeover involving the shareholders or even a merger between InBev and SABMiller. We will assess these possibilities and provide an updated fair value estimate as soon as possible.