Carlsberg faces extra £1bn bill for S&N

Published on Sunday 9 December 2007 01:05

CARLSBERG, the Danish brewing giant, could be forced into paying an extra £1bn for Scottish & Newcastle in a bid to prevent losing its 50% share of Baltika beer maker BBH, analysts say.

The tussle for control of the ownership of BBH in Russia has taken another step forward with the appointment of a chairman to the tribunal which is ruling on whether Carlsberg triggered a "shotgun clause" which would allow S&N to buy BBH outright.

A decision is expected within six months, but many analysts are now speculating that the tribunal could rule in favour of S&N, pushing up the firm's value.

One analyst said: "It is not unreasonable to assume that the tribunal will rule in favour of S&N. On that basis, given that S&N would be in the position to buy the whole of BBH, the board could justify its present share price."

Analysts at Dresdner Kleinwort have estimated S&N's 50% stake in BBH to be worth 4.4bn and it is believed an offer of at least 800p per share or 7.6bn would be required to acquire the whole of S&N. But if S&N owned all of BBH, its shares could be worth well over 800p.

Another analyst, who asked not to be named, said: "Whatever the arbitration rules, Carlsberg will want to close down even the slightest possibility of S&N getting 100% control of BBH. S&N is playing a good game in getting some value for its shareholders but may have to open negotiations."

A favourable arbitration ruling could allow the entry of a new partner, either SABMiller or Anheuser-Busch, buying the Carlsberg stake and then mounting a bid for the whole of S&N.