Pressure mounts over S&N deal

24-01-2008

Pressure mounts over S&N deal
Danish brewer Carlsberg has confirmed that it has secured the funding and financing to buy rival UK brewer Scottish & Newcastle (S&N).

Carlsberg and Heineken, which have formed a takeover consortium to buy S&N, face a Takeover Panel deadline today to strike a formal bid.

Negotiations continued late last night as pressure for an offer mounts with the deadline approaching.

"The financing is in place," a Carlsberg spokesman said, according to the Times. "We will keep our investment grade and Carlsberg Foundation will keep its minimum stake of 25 per cent… All options are open until midday."

According to the Daily Borsen newspaper, Carlsberg has been able to secure 31 billion Danish Kronors (£3.1 billion) from banks in order to make the offer.

The consortium showed its interest in buying S&N last October, initiating a series of bid offers starting from 720p per share. S&N rejected previous offers, saying that they undervalued the firm.

However, last week the maker of Strongbow cider and Newcastle Brown finally agreed to enter takeover talks after it was offered 800p per share of the company, or roughly £7.8 billion.

Carlsberg still faces due diligence issues over how to split S&N's profits with Heineken. The issue is not considered a deal-breaker, however, it may require the bidding consortium to request another extension from the Takeover Panel.

"Due diligence is still going on, so let's not jump to any conclusions," the Carlsberg spokesman reportedly added.

S&N shares have fallen 42.5p, or 5.78 per cent, to 692.5p in the morning's trading.

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