Scottish & Newcastle Agree To 800p Bid

The Scottish & Newcastle takeover saga has taken yet another twist today with the announcement that the prospective parties to the deal had agreed to discuss a proposal for an 800p per share takeover bid, which would see the independent brewery split up and divided amongst the consortium of bidders still in the running.

Following months of hostile talks with brewers Carlsberg and Heineken, Scottish & Newcastle, the manufacturer behind Kronenbourg and Foster’s, have agreed via their board of directors to open discussions on a deal valued at £7.8 billion, which could ultimately be put to shareholders depending on the outcome of the talks.

The move comes following two previous offers for the group which were rejected outright as being unacceptably low, and the involvement of the Takeover Panel which forced Heineken and Carlsberg to make a further formal approach by the end of January if they were to have any chance of acquiring Scottish & Newcastle.

Whilst discussions have opened between the directors of each respective organisation, Scottish & Newcastle’s board has warned its shareholders that there is still much to be discussed prior to any formal offer emerging. The sides have until January 24th to formalise any deal, following the Takeover Panel’s “put up or shut up” decision.

Much of the interest in Scottish & Newcastle is derived from what is seen as its key holding in the Russian drinks market, where it holds a 50% equity stake in BBH, a growing Russian manufacturer.

However Scottish & Newcastle have accused its larger rivals of attempting to exploit its assets for less than their value through the previous bids proposed. It remains to be seen whether the parties can agree terms on any potential deal, although it still seems as though agreement may be some way off.

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