Bid for S&N brewer turns hostile

S&N's famous brands include Newcastle Brown Ale

Carlsberg and Heineken have attacked Scottish & Newcastle's rejection of an improved 750 pence per share approach for the UK brewer as "ill-informed".

On Thursday, the two firms had raised the value of their bid approach from 720p per share, but it was rejected.

Edinburgh-based S&N, whose brands include Newcastle Brown Ale, accused the two of trying to buy the business "on the cheap".

The suitors said they believed S&N had misunderstood their intentions.

'Misunderstanding'

Denmark's Carlsberg and Dutch brewer Heineken hit back at S&N over the "tone and speed" of its response, in a statement to the London Stock Exchange.

S&N, which also owns the Fosters brand, had called the bidders' approach "highly conditional" on full due diligence, adding it had no hesitation in rejecting the offer, which it described as "wholly inadequate".

But the two suitors said that this description of their increased offer "stems from a misunderstanding".

The two firms argued that the focus of their due diligence would be on S&N's West European assets and "our key separation assumptions".

They demanded to meet with S&N's board to clarify their "limited requirements".

Carlsberg boss Jorgen Buhl Rasmussen said: "We find the board's intransigence and ill-informed rejection very disappointing.

"The time has come for S&N shareholders to direct their board to engage with us."'

Key asset

Carlsberg and Heineken plan to split up S&N if their bid is successful.

Heineken would take control of S&N's main business in the UK and some other European markets, while Carlsberg would take over the operations in France and Greece.

Carlsberg would also gain full control of Russia-based brewer Baltic Beverages Holdings (BBH), which is currently jointly owned by it and S&N.

BBH is seen as one of S&N's key assets, as it controls more than 85% of Baltika, Russia's biggest brewer.