Put up or shut up
Heineken and Carlsberg have made two “indicative proposals” but no formal bid yet for Scottish & Newcastle (S&N). Having lost patience, S&N has asked the Takeover Panel to set a deadline for a formal bid, which has been scheduled for 21 January.
You have to give it to the Brits: they have a way with words. Or who could have summed up the Takeover Panel’s ruling in five words only? “Put up or shut up.” In more prolix fashion, the panel has told the consortium of Heineken and Carlsberg to either make a formal bid for S&N or walk way from it.
The deadline for the formal bid has been set for 21 January 2008.
Normally, if a bidder does not make a formal offer within the agreed timeframe, it may not do so for at least another six months or unless another party makes a bid.
Obviously, the board of S&N welcomes the announcement by the Takeover Panel. By the end of January, the Consortium will have had three months to make a decision. S&N believes it is in the interests of the company and its shareholders that this long period of uncertainty is brought to an end.
So far, Heineken and Carlsberg have made two “indicative proposals”, the latest of which values S&N at GBP 7.5 per share, which equates to GBP 7.3 billion (EUR 9.8 billion). This was rejected by the Edinburgh-based brewer as “wholly inadequate”.
The key points of controversy between the two sides concern Baltic Beverages Holding (BBH), a joint venture company owned 50-50 by S&N and Carlsberg.
S&N alleges that Carlsberg’s offer breaches the shareholder agreement governing the venture and has taken its case to arbitration. Carlsberg’s CEO Jorgen Buhl Rasmussen, has dismissed its rival’s legal claims as having no merit.
The other point of contention is the worth of BBH, which is, without doubt, the most valuable of S&N’s assets.
In early January, S&N announced that the Arbitration Institute of The Stockholm Chamber Of Commerce has said that the dispute between S&N and Carlsberg over BBH’s shareholder agreement will be resolved by 3 July 2008.
S&N is confident that the arbitration court will support its claims that Carlsberg has misused confidential BBH information and has breached its duty of loyalty thus damaging the joint venture. Should the court rule in S&N’s favour, S&N expects it will have the right to acquire Carlsberg’s 50 percent share in BBH at fair market value.
Shares in S&N closed on 7 January at GBP 7.285, valuing the company at GBP 6.9 billion (EUR 9.2 billion).
