D-Day looms for S&N takeover bid
Jan 24 2008 by Iain Laing, The Journal
THE UK’s biggest brewer Scottish & Newcastle faces a critical few hours in its future today as a key deadline for its European takeover suitors looms.
Brewing giants Carlsberg and Heineken – in talks with S&N over a possible £7.8m deal – have until midday to announce their firm intention to make a bid under a “put up or shut up” deadline imposed by the City’s Takeover Panel.
Reports yesterday pinpointed funding difficulties and due diligence problems as potential hitches to the deal to buy the Edinburgh brewer which shut its massive Tyne Brewery in 2005 but still has around 80 staff making Newcastle Brown Ale in the Federation Brewery in Gateshead.
S&N, which makes Kronenbourg 1664 and Fosters, began discussions last week after the pair put forward plans for a recommended 800p a share deal – the fourth proposal since their pursuit began in October.Carlsberg, which last week said it was putting up the extra 20p a share in the pair’s latest proposal, said financing was in place for the extra cash, but a spokesman added that all options remained open ahead of the deadline.
The duo may ask for a second extension of the Takeover Panel deadline, although an agreed approach would see S&N carved up – calling time on more than 250 years of history for the brewer. The firm can trace its origins back to 1749, when the William Younger brewery was established in Leith, Edinburgh.
The Danish brewer is looking to take on S&N’s stake in their 50/50 Russian joint venture BBH, as well as the firm’s operations in France and Greece. Dutch giant 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 and executives had previously accused the European duo of attempting to pick up the business on the cheap.
Before this week’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 around 3,300 staff in the UK. It has breweries in Manchester, Reading and Tadcaster in North Yorkshire. The company also owns the Bulmers cider mill in Hereford and has administrative staff in Edinburgh and Staines, Middlesex.
In the first half of last year the brewer posted pre-tax profits of £191m on overall sales of £2.1bn.
