Offer for S&N upped to £7.8bn
Scottish & Newcastle (S&N) is expected to recommend a 800p-a-share offer from rival brewers Carlsberg and Heineken today.
The move comes after Carlsberg and Heineken increased their offer for S&N for the fourth time, valuing the company at £7.8bn. But there is speculation that a recommended offer could trigger rival bids from other major brewers.
American brewer Anheuser-Busch, Inbev and SABMiller are all believed to be awaiting more information on Baltic Beverages Holding (BBH), the fast-expanding beer business that S&N has claimed has been undervalued by earlier bids.
BBH has enjoyed very strong sales and profit growth in the Russian market - with rumours that profits are forecast to increase by 20% a year in the coming few years.
Carlsberg, which has a 50% share in the business at the moment, will take full ownership of the business if the takeover goes ahead. Heineken will take control of the S&N businesses in the UK, France and India.
The latest offer from Carlsberg and Heineken excludes a 13p dividend payable to S&N shareholders. It is understood that S&N advisors were pressing for this to be added to the offer - but was not a stumbling block to the deal being recommended.
One City analyst said: "A period of due diligence will follow any recommended offer. It is possible that other bidders could still enter the fray, especially once they get a clearer view of BBH's prospects. But Carlsberg and Heineken are in the box seat now."
l S&N is suing the owners of a bar in the City of London over a £45,000 loan.
S&N is taking Barry Martin, of Longridge, 235 Darkes Lane, Potters Bar, Hertfordshire, and Derek Kelly, 44-48 Clerkenwell Road, London, both directors of Gutshot, which ran the Shots Bar and Restaurant in Clerkenwell Road, London, to the High Court in a row over the March 2004 loan.
According to a High Court writ just made publicly available, the brewery lent them £45,000 for the premises in March 2004, with interest at 5% over base rates.
The writ says that the two businessmen personally guaranteed to repay the loan if their company failed to - the business was wound up earlier this year.
