Raised bid may see S&N sell-up
Jan 18 2008 by Iain Laing, The Journal
BREWER Scottish & Newcastle yesterday entered talks with its European suitors over a possible £7.8bn offer for the company.
The brewer has finally agreed to discussions with Carlsberg and Heineken after the duo’s fourth proposal since their pursuit began in October.
The potential 800p a share approach is subject to conditions including limited due diligence, S&N said.
The brewer, which also makes John Smith’s and Kronenbourg 1664, had previously spurned three approaches of 720p, 750p and 780p, accusing the European giants of attempting to pick up the company on the cheap.
But it said last week it was willing to open talks at 800p with the extra 20p coming entirely from Carlsberg.
Yesterday all three companies approached the City’s Takeover Panel for an extension of the “put up or shut up” deadline of next Thursday for the suitors to table a firm offer or walk away.
S&N’s shares rose about 6% on the news, but sunk bank later to a 3% rise. Carlsberg dipped 3.7% to 576 crowns and Heineken gained 3.9% to 40.87.
Danish firm Carlsberg and Dutch brewer Heineken plan to carve up S&N if they succeed in their overtures for the business, calling time on more than 250 years of history for the brewer.
S&N can trace its origins back to 1749, when the William Younger brewery was established in Edinburgh. It closed its huge Tyne Brewery in Newcastle in 2005, but still employs about 80 staff making Newcastle Brown Ale in Gateshead.
Carlsberg said it was putting up the potential 20p-a-share extra in the new proposal. It is looking to take on S&N’s stake in the 50/50 Russian joint venture BBH, as well as the firm’s operations in France and Greece. Heineken meanwhile wants the brewer’s UK business and operations elsewhere in Europe.
The fast-growing BBH is seen as the jewel in the crown of S&N’s business.
Before today’s talks, the brewer had pressed Carlsberg to release information to shareholders on the prospects for the division and launched legal action attempting to make Carlsberg sell its stake for breaching the terms of the joint venture.
S&N has about 3,300 staff in the UK. It has breweries in Manchester, Reading, Dunston in Gateshead, and Tadcaster in North Yorkshire.
The company also owns the Bulmers cider mill in Hereford and has administrative staff in Edinburgh and Staines, Middlesex.
