S&N Shuns Bid, Offers Own Price

LONDON -- Scottish & Newcastle rejected a sweetened offer from rival brewers Carlsberg and Heineken on Thursday, but for the first time indicated it would consider starting talks with the pair if the price was right.

S&N, Britain's largest brewer, said that the ?7.6 billion ($14.9 billion) offer from Carlsberg and Heineken, their third preliminary approach, "still failed to reflect the unique strengths and market positions of the company."

The 780 pence per share offer was some 30 pence more than the duo's previous bid for the maker of Foster's and Kronenbourg 1664 lager.

However, S&N said it had told Carlsberg and Heineken that it was only "prepared to engage with them" if a firm proposal of at least 800 pence was put forward.

Carlsberg and Heineken appealed to S&N shareholders to pressure the board to join in talks. The pair warned shareholders they were not prepared to make a hostile bid and that, without a recommendation from the board, the offer would lapse on Jan. 21.

If both sides stick by their current positions, investors could be left in limbo for some time as S&N awaits the outcome of a legal challenge to its Russian-based joint venture with Carlsberg, Baltic Beverage Holdings.

S&N earlier this week filed a claim in Stockholm seeking to take sole ownership of Baltic Beverages, alleging that Carlsberg has misused confidential information and breached its duty of loyalty under the Baltic Beverage Holdings joint-venture agreement while making its takeover bid with Heineken.

On Thursday, it added that another condition of talks proceeding was Carlsberg's agreement to the publication of "proper information" about the venture.

Under the proposed takeover, Copenhagen-based Carlsberg would gain sole ownership of Baltic Beverages and S&N's French, Greek and Chinese operations, while Amsterdam-based Heineken would take control of its British, American, Indian and other markets. Baltic Beverage operates 19 breweries, holding the top position in Russian, Baltic and Kazakh beer markets, and ranks third in Ukraine. Its brands include Baltika, Arsenalnoe, Slavutich and Alma-Ata.