NETHERLANDS: ING puts brakes on S&N takeover talk

By | 5 April 2007

A broker has deemed Scottish & Newcastle's chances of being taken over unlikely.

ING today (5 April) downgraded its coverage of the brewer's shares to 'sell' from 'hold', while warning that the market has been overly optimistic about a possible deal. Speculation over the last two weeks has fuelled a leap in S&N's share price, as talk has suggested the company may be the target of a takeover.

As well as lowering its coverage, ING raised its target price for S&N to 566 pence from 519.

In analysing possible options, the broker concluded that neither an industry buyer nor private equity would be able to extract value from S&N at its current price. The only possible path could be that S&N merges with Carlsberg, ING said, noting, however, that Carlsberg has time on its side and could wait until cost savings and real estate valuations have improved its net debt.

ING was working to an estimated break-up value of 581 pence for S&N.

Sectors: Beer & cider

Companies: S&N, Carlsberg

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