altria comes out and supports that proposal. it's 42.15. 42 -- something like that 4. 41% of the offer is in ab inbev stock. that has an effect of bringing down the overall value. this was pointed to in the press release in which sab says we don't believe this values the company where it deserves to be. when this began, there was much expectation we might get a price around 42. many thought that price was appropriate for ab inbev. let's step back and tell you where we are. one week to go before october 14th, the drop dead date, if you will put up or shut up. if the board says no on that date, there's no engagement, it's possible that this -- they will go away, ab inbev. it canning extended by the board of sab that put up or shut update by two weeks at a time. but it's unclear whether that will be the case if they can't reach something between now and then. at this point, judging from comments on a carlos call that's been ongoing, there hasn't been much engagement of any significance in terms of making progress. they said no, no,

as they mention altria are the biggest shareholder. thank you, duncan fox.eports from a dutch safety board on last years malaysia flight 17 is due out tomorrow. ramy inocencio looks at the airlines tortuous year -- airline cost to mulch it was year. ♪ david: welcome back to the bloomberg market day. get the final word into the cause of the crash of malaysia airlines like 17. the flight went down in ukraine last year in july 4 months after mh 370 disappeared somewhere over the indian ocean. the malaysian kerry -- carrier has now contracted, gone o reveal and has t itself. ramy inocencio has more. ramy: it's been 15 months almost to the day where the public saw images of the billowing smoke in ukraine. you can see the wreckage from malaysia airlines flight 17. of course, the financial impact was quick as well. malaysian airlines stock price plunged 13%. managed to climb back 33% through the end of december, and then it stopped. that is because the company delisted from the malaysian stock exchange. it is now owned by the malaysian sovereign wealth fund. totruc

you're talking about a performance that's double that of altria whichhich in-turn is triple that of the sector. that's enough. let's try to make it here. we bounced off this trend line consistently, consistently, consistently and my thinking here is fade this. we trade around 48 and change. you can get a 10% drop. if you've got it, trim it, sell it. if you want to short sell, try this one. >> it's a convincing case but could there be a fundamental reason why reynolds would trade to such a huge premium to the others or no? do you think that's wrong? >> the only reason is they have gotten a little bit of a revenue boost recently. this is not a long-term secular trend. it's not a friend of tobacco companies. they were seeing declining revenues and most of the street slooking for this to level off and decline. this is not a growth sector. why is it trading at a premium to the rest of the s&p. i agree with this. when i'm take a look at this thing and a 10% decline, a good way to play something getting stretched at this point is to use options. i was looking specifically at the december 47.5,

inbev noting the proposal hinges on altria group and bevco the number two shareholder controlled by the santo domingo family opting for the partial share alternative which would include a combo of cash and stock. no word from s.a.b. miller which owns peroni and miller lite on this latest offer. but analysts say the key will be bevco agreeing to the new price. >> i think what the bid does is keep the door open for negotiations because at this pointinbev up until p th point they're proposing an offer. they haven't made a formal offer. and unless they get some level of detail and communication from s.a.b. they're not going to be able to do that. >> the higher offer comes after three previously rejected ones. at 42 pounds and 40 and 38 pounds after that. s.a.b. raise the its cost savings target to more thain billion dollars by 2020 a move meant to highlight its strength as a stand-alone company. now negotiations are getting down to the wire. according touchlt k takeover rules a.b. inbev which owns budweiser and stella artois have until noon eastern on wednesday stoub mitt a final bid or wal

stock, altria the group. they come out this group and say sab, get on with it.s that enough to get it over the line? matthew: they could've said we support the proposal. they say we encourage them to engage probably. i think they are sending a clear message. jonathan: the context around this company. on the other side, is there an argument for sab miller to stay sab miller without -- is that argument strong enough? matthew: we are not sure. sab miller is a company that could stand to benefit. we're talking about a combined company that would sell one out of every three beers that we drink worldwide. 30, not enough. 40, not enough. 4250, maybe we talked. -- 40 to 50, maybe we talk. abi is a shark. in a shark needs targets. i see this one consummate. tom: they smell blood. matthew boyle of bloomberg. think you for joining us. coming up, as the specter of recession holds japan. what is corona's breaking point -- what is the -- what is corona's breaking point? ♪ some coke good morning. what a busy morning. 10 minutes into the session and let's get -- jonathan: good

there's a partial share alternative for the 41% that is owned by altria and the santo domingo family.increase the consideration there as well. all of this started 42.15, a partial share consideration. both have come up. at this point there's a 50% premium on the close of the price. a 33% premium for those who would take that psa, which is available to all shareholders but is likely only to be desired by altria and the santo domingos who are going to want a tax-free transaction. the deal itself has to get to a definitive agreement or a 2.7 filing, has a couple weeks to go until then. will require large divest choit in the u.s. and china. sab stock up this morning, ab inbev up to a certain extent as well because of generally bullish views by many of the analysts who follow the company. let's say they begin to close 9 to 12 months from now and they realize those synergies in revenues and cost savings. sabmiller there, there was doubt would they or would they not get to the deal. in the end the santo domingo family playing an important role here with two members on the board of sab, face-

altria has been incredibly strong stock.but that additional money that would come their way. more buyback. >> finally, i did want to also hit emc. we talked about it a great deal yesterday as we shared the details of a potential deal under which dell would buy the company. he emc stock up a bit today. the deal is above 27. the question is how much and what the composition of said deal would be. as i reported yesterday, it would rely enormously on the credit markets to complete this deal. dell would have to borrow at least $40 billion in the credit markets, have $50 billion plus in debt on its own balance sheet. the leverage ratios, you can work them out. it's not crazy. it gets up there. maybe four times or so, but not beyond the pale. that said, it's asking a lot of the credit markets. even with this idea of hybrid approach. right now they're still working on the credit market side of this. people familiar with the situation tell me they have not gotten it locked up on the credit markets yet and the debt they would need. st

but the significant stock component with a small cash component going to altria and the santo domingosht to want that part of a deal because it would be a lot more stock and therefore tax-free. all right. >> how many more tries does brieto have? >> not many. at this point their hope is to get sab to push the so-called put up or shut update. >>> deals of another kind, watching the ipo market hitting bumps in the road last week but ferrari setting a $1 billion ipo today. we missed you last week. >> you would think why -- three of the biggest deals of the year are occurring in the next week in the worst time for the ipo market. it's mystifying, that's why we're surprised, those of us who watch the ipo market, about ferrari's announcement. everyone thought they would put it off given the market conditions. no, as you heard, they dropped it today. the road show beginning today. they'll raise about $1 billion in terms of the deal. look at the numbers. 17.2 million at 48 to $52. the important thing here, likely to be pricing next week. that's what i'm hearing. not official. pricing talk is on

altria back to the deal for sabmiller and accommodation of the broom juggernauts.eep an eye on germany. 9%ld be jumping in excess of area the time it does happen -- had over the past 12 months. the spike of trade in september and the erosion and the stock market as everybody realized have to close nuclear assets. and pay for the cleanup. didn't they have enough money set aside? yes, concerns the german minister. eon on 9% and could see the fact they do indeed have enough cash to be able to shut her and cleanup -- shutter and cleanup. guy: caroline: -- caroline hyde, thank you. bank of america merrill lynch as we speak putting got a note that rab has been raised to neutral. a good day when the stock goes up by 9%. what with thing will happen with this rav store. him --iful impact on how stocks will open. we're focused on sabmiller and of course glencore front and center. confirmed quite a lot over the last half hour. a sea of green. higher.we will get better than what it was before. germany looks like it will outperform. it could be up by 0.4%. u.s. futures as well.

company will be heavily own still by the biggest stakeholder, 40% or so, by the biggest investor, altriaill have a 10% stake. something to keep an eye on. all across food, beverage, tobacco, activist investors getting involved. i would not expect anything near term here. sab management was against the deal. what happens to them now? ken: given their decentralized management style, ab will be looking to them heavily to look at the markets that they do not know right now. said, they know the company, as a competitor, but in terms of the region they are not familiar with, they will rely on regional managers, how they are managed. there will be that to keep an eye on, and the response from other beer makers. are they in a scramble to look for potential shooters -- s uiters? ken: i think so. this puts second-tier brewers under the microscope to look at their programs. if you have a competitor on a global scale, compared to this new giant, they will have to look at that, sure. scarlet: thank you so much, ken shea. motto the king's of beer? alix: i don't know, i drink craft beer. new data confi

phillip morris, fast growing overseas versus the altria. you have to separate yourself from someone who may have bought it at 85, 90 where it was not good and someone who bought it after this pre announcement and that person is feeling pretty good. i would say that it is a call not on china, but on their execution in china because i continue to believe that the consumer is doing much better in china, those auto sales are very good in china, the country is making a come back. you just have to hope that the execution has improved in pizza hut, not that good, and that the chinese suddenly discover that they like a burrito with a lot of chemicals in. >> you never know. >> chipotle reports after the close. they have only eight ingredients in a burrito, some of these other guys have 80 ingredients. what are some of those other ingredients? do i have to go to westlake chemical or -- >> or dow. >> what's in those things? i mean, what is in -- someone give me what is that magic recipe. >> final thought for me on yum! if they do have that security th

your hormels, altria, color rocks, dr.per, reynolds american, all those guys, even starbucks another one at a new 52-week high. it's these consumer names that have been holding the market up tremendously. we had a great rally in energy in the last week and a half. a lot of that is given back on the oil to the downside, particularly in the exploration and production stocks which had very big moves last week and a lot of people don't believe they're going to be permanent because they're taking a lot of profits today. >> thank you very much, bob. let's go to bertha coombs at the nasdaq. >> let's continue the theme, tyler. consumer stocks are among the strongest performers today. ross stores is the day's leader, o'reilly automotives generally among those in the new high list and it is again today along with starbucks. as we take a look, also mattel having a pretty good day. barron's is positive on the new management and the company's direction ahead of earnings noting the dividend yield has reached 7%. some other movers, amazo

second the deal would be for cash with an alternative choose to allow big share olders like altria and the santo do minute goe family to take it in cash and stock for tax returns. third ab inbev is looking to life up $70 billion in debt to finance the process. if the deal fell apart they would pay a $3 billion break up fee. fifth a deal would need to be finalized by tomorrow now sab miller has asked for an extension to put the full deal together and that deadline will be at least in their request october 28th. so there it is for now, a tentative deal to create the world's biggest brewer by far. more details, kelly, bill, smurl to follow, all the logistics and what promises to be possibly a long battle to get this deal done for both shareholders and regulators. >> and you mentioned those logistics. obviously people are look to go what assets may be in play including the joint u.s. -- what is it called -- >> joint venture -- >> the jv together. there's a son of other plands that have all these different potential ownerships that have to be sorted out, don't they? there to be a lot of uph

it's been a small group of consumer names, altria, reynolds american, the cigarette company. clorox has been doing great this week. they've been hitting new highs on a regular basis but not much beyond a small group of consumer names. no love at all for metal stocks again today. we're seeing notable declines in some of the steel names, freeport another day down 4%. alcoa down 3%. i suspect, mandy and tyler, maybe they're trading down ahead of china's gdp report which is out sunday which is widely expected to have a six handle in front of it. we have been talking 7% growth earlier in the year for china. guys, back to you. >> a break below that 7% mark might unleash a wave of stimulus. trig they're stimulus that everyone is expecting. could turn out to be a good thing. we'll have to wait and see. thank you very much, bob. let's head over to the nasdaq and times square with bertha coombs. >> take a look at the board and how things are trading. composite is kind of flat. biotechs is are weak, they're weak for this week as well. and apple is also down on the week, but the nasdaq 1

phillip morris, altria hitting record highs. >> what's the best way to make money in consumer staplesways great to speak you. you don't expect outperformance from here but aren't willing to go stock picks. >> we look at pe, this is a slow growth group, the companies can grow from 6 to 10%, you don't want to overpay for them. a lot of the things that have done best are above 25 times earnings. we would look at those as a source of funds. the few that you have not done as well, companies like proctor & gamble, pepsi has done okay but still has a lot more left, under 20 times earnings, cvs 19 1/2 times earnings. we get you get the same stability but you have more upside. if you are bullish on the market we do think you want to go to other sectors, if you are bearish this will be a little more protective, but don't rely on the things is that worked best up to now. >> are you invested in any of thieves picks, david? >> yes, we have proctor & gamble, we have been buying a lot more down here, it has been one of the biggest laggards in the dow and in this sector. it has a ceo change, we think

they say a miller's shareholder or one of them, altria, the tobacco company, has said it supports thebillion. >> yeah. it's not enough basically. not enough. >> how's the stock market today? >> we're moving higher very nicely. what we're seeing is crude oil prices rising for the fourth day in a row. and as you probably know, recently crude oil and stocks have been quite tightly correlated. if it is true that crude oil has managed to find a bottom, it's been relatively stable for the last couple of months. that will be positive hopefully for the overall market. but we also got some better than expected results from the likes of pepsico and keep in mind that the bar is very low going into this earnings season. if the bar is low enough, it always makes it that much easier to beat. but expectations are low. the s&p companies are expected to report 4.2% fall in fourth quarter profit which would be the biggest decline in six years. >> mandy, thanks. >>> up next -- smugglers selling nuclear weapons to isis. new developments on the investigation causing alarm here and around the world. >>> an