Devoted to Managers and those that seek to improve their management skills

The story playing out between Anheuser-Busch (NYSE:BUD) and the attempted takeover by InBev NV, has played out like a Hollywood script, as the usual assertion that the price offered was far below the value of the company, has now been responded to be InBev, saying they may take the deal directly to the shareholders. This is usually how unsolicited takeovers work out.

When I say they might take the case directly to shareholders, I mean they'll either do it through a tender offer or put their own board in place through a proxy battle.

To me, the offer was an incredible one, when you look at the stock performance of Anheuser over the last five years. InBev offered $65 a share, whereas the stock has been stuck at around $50 a share on average during that time, and much lower over the last three years.

What irks me from a management standpoint is the response to the takeover bid by Anheuser-Busch leadership; not the rejection of the offer, but the steps being taken to battle the bid.

Executives from the company are now looking at cutting costs through primarily offering early retirement to some of its workers, which would effectively cut about 10% to 15% work force, accounting for around 30% of the initiative. Other measures to be taken would be to improve productivity and cut energy costs.

By 2010 the company says it wants to slash $1 billion in operating costs.

Why this bothers me is it took a hostile takeover bid to knock the management on the head to do things they should have been doing all along. And now they're doing it for the wrong reason - to keep their jobs.

While it's good to see them respond, it underscores the reason they're in trouble in the first place. If they had been doing these things for years, they would have been in a much stronger position to not only fend off a hostile takeover, but to be in the place where they would be too expensive to buy and too well run to make an offer look legitimate.

The fact that they're now scrambling, shows the weaknesses in the company are real, and management hadn't been doing the things they needed to make it an effective company.

One good thing about attempted takeovers, it does reveal the weaknesses of leadership and what is needed to add value to the company. Now the leadership in the company has been served notice and are battling to right the ship. It's too bad it took this type of event to get them to do the job they should have been doing all along.