Offer for S&N may come next week, report

19 October, 2007

Brewers Carlsberg and Heineken may launch a bid for their UK rival, Scottish & Newcastle, as early as next week, according to reports.

Scottish & Newcastle (S&N) board members were in discussions on how to counter a possible offer, which they believe Carlsberg and Heineken may be ready to launch within the week, according to a report in the Financial Times newspaper Friday.

Carlsberg and Heineken confirmed this week they were in talks to buy and carve up S&N, the UK’s largest brewer and owner of John Smiths and Kronenbourg brands.

But S&N executives reacted angrily to the move, warning an approach would be “unsolicited and unwelcome”.

Analysts expect any potential offer to value S&N at around £7bn, or 800p per share. S&N’s board may argue the brewer is worth more, though its share price was well below this level prior to the recent market speculation.

Unions will also be concerned about possible job losses from any buyout deal. Scottish MPs raised concerns Thursday about the future of S&N’s Edinburgh headquarters, should a takeover result in a cost-savings programme.

Under current proposals, Heineken would take S&N’s business in the UK as well as operations in several other European markets. Carlsberg would take operations in France and Greece, as well as complete control of its prosperous joint venture with S&N in Eastern Europe, BBH.

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