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. Last Updated: 07/27/2016

Baltika Spat Brews Over S&N Claim

LONDON -- Scottish & Newcastle, fighting a hostile approach from Carlsberg, said the Danish brewer breached the terms of their Baltic Beverages Holding venture and must offer the British company its stake in the business.

The Edinburgh-based company said Tuesday that it was considering whether to buy all of Baltic Beverages Holding, which owns Russia's largest brewer, or find a new partner. Carlsberg said in a statement that S&N's claims "have no merit."

Carlsberg and Heineken said last week that they were teaming up to explore a joint bid for S&N, the maker of Foster's and Kronenbourg, and split the company's assets. Carlsberg wants control of BBH as West European beer growth slows. The British brewer has called the bid "unwelcome."

"I don't know if they've got a leg to stand on," said Christopher Gower, an analyst at MF Global in London, referring to S&N. "This is a tactic to get Carlsberg to bump up the price. They're trying to extract as much value for [BBH] as possible." He said other brewers, including SABMiller, might also be "waiting in the wings" to do a deal with S&N for BBH.

S&N "had been content with the joint ownership arrangements in BBH and had wanted them to continue for the long term," the statement said. "The board has felt compelled to respond swiftly to protect its position and capture the full value of BBH for the benefit of S&N's shareholders."