Carlsberg and Heineken had been all smiles when it submitted its initial 720p-a-share offer last month – even though S&N quickly dismissed it as ‘derisory’. Now they’ve come back with a higher offer at 750p-a share, and received an equally abrupt response – this time S&N described the proposal as ‘wholly inadequate’. Clearly it didn’t think that this was probably the best takeover bid in the world.
And its two suitors are starting to lose their icy Scandinavian cool. They quickly fired back a terse statement expressing their displeasure at S&N’s attitude, with Heineken boss Jean-Francois van Boxmeer and Carlsberg counterpart Jorgen Buhl Rasmussen both urging S&N shareholders to get involved. As the latter huffily put it today: ‘We find the board's intransigence and ill-informed rejection very disappointing. The time has come for S&N shareholders to direct their Board to engage with us.'
The real bone of contention is BBH, the lucrative Russian joint venture between Carlsberg and S&N that’s been making money like there’s no tomorrow. Carlsberg wants it all to itself, but S&N claims that its partner is under-valuing the business. And if it wins the court case it has brought against Carlsberg for breach of contract, it could force the Danish giant to sell its half of BBH. So it’s unlikely to roll over until that’s resolved.
And then there’s SAB Miller. Reporting its first half results yesterday – which showed a 14% profit hike – the UK-listed group described the Russian beer market as ‘one of the most exciting markets in the world’. They’d love to get their mitts on BBH, and could yet try and upset the hops-cart.
One option S&N unfortunately don’t seem to be considering is the brilliantly-named PacMan defence, which (according to the Wall Street Journal) Rio Tinto is planning in response to the advances of BHP Billiton. This is where a bid target turns the tables on its suitor by launching a counter-bid – but S&N buying Carlsberg might be a bit too much of a stretch.
Still, it’s shaping up to be a good old-fashioned dust-up. Should have known that would happen when there’s beer involved.