Anheuser-Busch grasps at lawsuits; Yang blasts Icahn, Ballmer; proxy firms' split decision on Grey Wolf

By Aaron Hochman-Zimmerman

New York, July 9 - Anheuser-Busch Cos. Inc. continued to do its best to either get rid of InBev NV or at least drive a harder bargain on Wednesday, but either way the efforts landed both companies in court.

Delaware Chancery Court will decide whether to allow InBev's slate of directors to run, while District Court in Missouri may decide to block the merger altogether.

In technology, Yahoo! Inc.'s Jerry Yang sat on the Wall Street Journal's proverbial couch and vented some of his frustration over the preliminary deal forming between Microsoft Corp. and Carl Icahn to divide up his company.

Elsewhere, proxy firms involved with the merger Grey Wolf Inc. and Basic Energy Services Inc. offered a 50/50 split over whether or not the merger should proceed.

Also, shares of Toreador Resources Corp. improved over 5% with a tender offer and the announcement that it is seeking strategic alternatives.

Meanwhile, the Dow Jones Industrial Average was beaten for 236.77, or 2.08%, to end at 11,147.44, while the Nasdaq Composite Index lost 59.55, or 2.60%, to finish at 2,234.89.

The S&P 500 gave back 29.02 or 2.28%, to close at 1,244.68.

InBev sues to oust board

Firing back at Anheuser-Busch's lawsuit, InBev asked for a summary judgment from Delaware's Chancery Court where Anheuser-Busch is incorporated.

InBev is pushing to have its slate of directors put on the board, including Adolphus Busch IV, the uncle of chief executive officer August Busch IV.

"I'd say there's about a 65% to 70% chance that InBev could win at $65 [per share]," an equity analyst said.

"I couldn't see it going over $68 [per share]," he said.

Meanwhile, Anheuser-Busch is still suing in Missouri. "For obvious reasons, they want home court advantage," the analyst said. "InBev has yet to respond to that.

"I just feel Bud has no case."

Anheuser-Busch brought the issue of InBev's dealings in Cuba to the front of the suit, but that business makes up close to 0.4% of InBev's total holdings, the analyst said.

InBev has said that it would keep the North American headquarters in St. Louis while it has approximately 570 employees in Cuba, he said.

"What is Bud implying? That they are going to take the thousands of English-speaking employees and move them to Cuba?" the analyst asked.

Shares of Anheuser-Busch (NYSE: BUD) slipped by $0.46, or 0.74%, to close at $61.30.

Yang carps at Icahn plan

Jerry Yang, Yahoo!'s chief executive officer had strong words for both Carl Icahn and Microsoft chief executive officer Steve Ballmer, on Wednesday.

Yang accused Microsoft of being only interested in "destabilizing" Yahoo! rather than making a deal.

Yang discouraged investors from voting for Icahn's slate of directors which is widely considered to be a sell-only slate.

Still, "people are saying that they want more detail from Icahn," an equity analyst said.

Meanwhile, Yang fired back at the assaults on his company and job.

"To trust Mr. Icahn and his board is really a bad choice," he told the Wall Street Journal.

Still, Yahoo!'s investors are trusting Icahn, or at least his intention to sell at least the search business if not the whole company.

"Obviously everyone wants the whole company," an equity analyst said, "My question is, with Yang gone who is going to take over Yahoo! ... Is it going to be [Susan] Decker, the president?" the analyst asked.

Earlier in the deal's lifespan, Legg Mason's "Bill Miller was clamoring for $37 [per share]," the analyst said, now he was heard saying "nothing less then $33 [per share] and Icahn will have our support," the analyst said.

"They all have egg on their face."

Shares of Yahoo! (Nasdaq: YHOO) gave up $0.82, or 3.33%, to end at $23.82.

Shares of Microsoft (Nasdaq: MSFT) lost $0.62, or 2.40%, to finish the session at $25.23.

Toreador drills for alternatives

Toreador Resources announced that along with seeking strategic alternatives the company will repurchase up to $10 million of its 5% convertible senior notes due 2025 by the end of the year, according to a press release.

"Although we believe we have many exciting exploration prospects to evaluate over the next several years, we believe it only prudent to retain Merrill Lynch to assist us in developing a strategy that is in all respects in the best interests of shareholders," said Nigel Lovett, Toreador's president and chief executive officer.

The Dallas-based energy firm saw its stock (Nasdaq: TRGL) tacked on $0.35, or 5.08%, to $7.24.

Proxy firms split on drillers

The merger between Grey Wolf and Basic Energy Services has withstood the interjection of Canada's Precision Drilling Inc. which made an unsolicited offer in the middle of Grey Wolf and Basic Energy's negotiations.

Now proxy firms are divided over whether or not the merger should go through, an equity analyst said.

"Usually they're 95% in favor," he said, but both Proxy Governance and Egan-Jones are for, while Glass Lewis and RiskMetrics are against.

In a press release Grey Wolf's chairman, president and chief executive officer, Thomas Richards responded to Proxy Governance's blessing. "Together with the Egan-Jones recommendation, this is a strong validation of our view that the Basic merger is in the best interests of Grey Wolf stockholders," he said.

Shares of Grey Wolf (AMEX: GW) fell $0.13, or 1.46%, to $8.75.

Shares of Basic Energy Services (NYSE: BAS) added $0.68, or 2.44%, to $28.54.

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