The two brewing giants have already had two offers rejected out of hand before Christmas, the first at 720p-a-share and the second at 750p. Now they’ve apparently come back offering to pay 780p, or £7.4bn in total – but S&N said today that it won’t get out of bed for anything less than 800p.
The clock is ticking for Carlsberg and Heineken. They’ve now got just 11 days to produce a formal bid for S&N under the Takeover Panel’s ‘put up or shut up’ rules; if they don’t, they won’t be able to bid again for six months. However, they’ve repeatedly insisted that they won’t do this until they get a recommendation from the S&N board – which still looks a long way off.
The main bone of contention is BBH, the fast-growing Russian joint venture between Carlsberg and S&N. Carlsberg wants it all to itself (with Heineken taking S&N’s UK operations), but S&N say it’s under-valuing the business and is trying to force it into publishing two-year sales forecasts. Attack being the best form of defence, it’s also suing for sole control, arguing that it will save its shareholders £100m (a number that analysts seem to think is surprisingly high).
In its statement this morning, S&N said it had ‘considered this proposal carefully’ but decided that it ‘still failed to reflect the unique strengths and market positions of the Company and again failed to be competitive with the alternatives the Company can pursue for delivering value to its shareholders.’ It also suggested that much of the latest increase reflected currency appreciation. So Carlsberg and Heineken clearly still have a lot of work to do.
The sole olive branch was S&N’s concession that ‘it is prepared to engage… but only when a firm proposal of at least 800 pence per share had been made.’ So the question now is whether Carlsberg and Heineken are prepared to stump up another £200m in the next week or so. If not, they’ll have to go hostile, taking the fight direct to shareholders – or walk away.
This may have been intended as a friendly takeover bid, but it’s been anything but friendly so far...