S&N has called the proposed break-up
bid 'unsolicited and unwelcome'
Posted on 10/17/2007 10:56:17 PM PDT by bruinbirdman
Carlsberg and Heineken revealed yesterday that they were in talks about making an offer for S&N, which owns brands including John Smith and Kronenbourg and Fosters in Europe, but said no formal approach had yet been made.
S&N has called the proposed break-up
bid 'unsolicited and unwelcome'
S&N responded by calling the proposed break-up bid "unsolicited and unwelcome" and said it remained confident in its future as an independent company.
City analysts said S&N's future was likely to be as part of a larger company but warned that a takeover battle was likely to ensue for the UK brewer.
Trevor Stirling, an analyst with Sanford Bernstein, said: "The fat lady hasn't even started singing yet. The Carlsberg/Heineken talks are highly likely to proceed to a full bid but other groups could come in."
Anheuser-Busch, the US brewer that owns Budweiser, and London-listed SABMiller are considered the most likely counter bidders.
S&N shares soared nearly 20pc to 756p yesterday, giving the group a market value of £7.2bn. Analysts expect a bid for the company to be valued as high as 800p a share.
In a statement to the London Stock Exchange, Carlsberg said: "Carlsberg and Heineken confirm that they are in discussions regarding the formation of a consortium to make an offer for the entire issued share capital of Scottish & Newcastle. An offer, if made, is likely to be in cash."
Carlsberg and S&N jointly own BBH, a Russian brewer, and any deal would see the Danish company take full control of that business as well as S&N's operations in France and Greece.
Heineken would acquire S&N's businesses in the UK and other European markets.
Carlsberg warned that any deal was some way off. The company said: "To date no formal approach has been made to Scottish & Newcastle and there can be no certainty that an offer for Scottish & Newcastle will ultimately be forthcoming."
In its reply, S&N said it had not received an approach and urged shareholders to "take no action at this time".
Carlsberg was widely expected to make a bid for S&N. The Danish brewer's BBH joint venture with its UK rival in Russia is seen as the main driver for future growth at the two companies.
Either party can make an offer for the other's half of BBH but under the terms of the joint-venture the recipient of the bid has the option to make a higher offer and win control of the business.
A full bid for S&N by Carlsberg would allow the company to avoid such a scenario and the 'shoot-out' system could also act as a poison-pill to discourage any rival bids for the UK company.
Heineken's role in a possible joint bid took analysts by surprise but the Dutch group's participation allows Carlsberg to avoid competition issues in the UK and Finland where it has operations alongside S&N.
News of the bid comes at a time of transition for the UK brewer. Tony Froggatt, chief executive of S&N, announced last month that he would leave the company in December and would be replaced by John Dunsmore, former head of Western European operations. Many in the City had expected Froggatt to preside over S&N's takeover ahead of his departure.
belch....
I hope this doesn’t mean all these beers will start tasting the same...I never really cared for Heini...Carlsberg is better, but a variety of beer is good thing for everyone!
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