The two European brewing giants have increased their offer for their smaller UK rival to £7.8bn, or 800p-a-share, prompting S&N to finally give them access to their books to start due diligence. And not before time – the Takeover Panel-imposed ‘put up or shut up’ deadline expires on Monday, after which they wouldn’t have been able to bid for at least six months.
It’s been a long flirtation by Carlsberg and Heineken, although so far they’ve had about as much encouragement as Jacqui Smith would get if she rang up to ask for an invite to the Policemen’s Ball. Not only has S&N already rejected three indicative bids (at 720p, 750p and 780p), it’s also suing Carlsberg to try and wrest sole control of Russian joint venture BBH. So it didn’t exactly welcome its continental admirers.
However, having said last time that it would be forced to consider any offer over £8, S&N didn’t have much choice but to drop its aggressive stance once the pair came back with their latest offer. It’s still acting coy – the proposal is subject to certain conditions, there’s no certainty a formal offer will emerge etc etc etc – but everyone seems to think that it’s pretty much a done deal. And since the stock only worth just over a fiver back in March, its shareholders should be happy enough.
Carlsberg, which is apparently going to pay the extra 20p-per-share (presumably that’s a lot cheaper than a long drawn-out court battle) will be thrilled if the deal goes through and it can finally get its hands on BBH – the Russian operation has become a licence to print money, hence why S&N was so unwilling to roll over. However, it seems unlikely that Heineken shareholders will be quite so ecstatic. The Danish brewer will take control of S&N’s UK brands (including John Smiths, Fosters, Kronenbourg and Newcastle Brown) but it’s not exactly a high-growth market – it will need to go some to get Britons drinking more beer than we do already.
It would also mean, of course, that another FTSE 100 company (and one of the few Scottish ones) passes out of British hands. However, even if it would never happen in France, we prefer to celebrate the potential S&N deal as a symbol of the UK’s anti- protectionism. The glass-half-full view, you might call it.