UK: Scottish & Newcastle Q4 in line, reiterates takeover dismissal

By | 14 January 2008

Scottish & Newcastle has seen its fourth quarter perform as forecast, while at the same time has rejected the latest proposed offer from Carlsberg and Heineken.

The UK-based brewer said today (14 January) that it expects its full-year results for 2007 to come in "as set out at the time of its Q3 Trading Update" in November.

"Despite the widely-reported difficult UK trading conditions in Q4 - particularly in the on-trade - total beer and cider volume was down by only 2% and sales were level year-on-year," S&N said.

"The major brands' volume and sales were up 1% and 3% respectively. Our resilience in the UK is based on our brand portfolio strength and market leadership as well as strong performances in the off-trade and with cider."

In France, where the fourth quarter is traditionally "a relatively small part of the trading year", volume was "slightly up", the company added.

At the same time, S&N reiterated its rejection of Carlsberg and Heineken's latest offer of GBP7.80 per share. Last week, the two European brewers made a third move for S&N, upping its proposed bid by GBP0.30 per share. S&N rejected the proposal, saying that GBP8.00 per share would lead to the UK brewer coming to the table to start discussions with the two.

"The increase in the revised proposal represents even less of a movement by the consortium to reflect the value of S&N than the headline number suggests," the UK brewer said. "This is due to the depreciation of Sterling against the Euro, Rouble and Dollar since the consortium's previous proposal to acquire S&N, submitted on 15 November 2007." During this period, Sterling has fallen 5.8%, 5.6% and 4.6% against those currencies, S&N said.

John Dunsmore, CEO of S&N, also took the opportunity to push Carlsberg for greater public transparency regarding future projections for their Eastern European brewing joint venture, Baltic Bevrages Holding. S&N has sent Carlsberg further details of what it wants the Danish brewer to publish - namely, beer market volume growth for Russia and total BBH average selling prices, sales, EBITDA, EBIT and capital expenditure for the next three years.

"We have clearly stated the level at which we would engage with the consortium and have again called for greater transparency on BBH," said Dunsmore. "We would urge shareholders to continue to press the consortium to co-operate in releasing the BBH information."

Full results for last year will be released on 19 February. The UK Takeover Panel last month gave Carlsberg and Heineken until 21 January to make a formal offer for S&N, or face being disallowed from making a bid for the company for a further six months.

Sectors: Beer & cider

Companies: S&N, Carlsberg, Heineken, BBH

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