Scottish & Newcastle has had its share coverage downgraded, due to a potential takeover bid from Carlsberg now seeming "unlikely".

Merrill Lynch today (13 September) lowered its rating for the UK-based brewer to 'neutral' from 'buy'. The broker was reacting to comments made earlier this week by Carlsberg's CFO and deputy CEO, Jorn Jensen, who suggested that he has not yet seen a solid business case for a move to buy S&N.

In May, Carlsberg amended its charter, allowing leading shareholder the Carlsberg Foundation to dilute its stake in the brewer, whilst maintaining control of voting rights. The Foundation currently holds 51.3% share capital but will lower this to 25%, thereby freeing up around DKK45bn (US$8.23bn) in new capital.

Merrill also said that Jensen had emphasised that the charter switch had nothing to do with a potential bid for S&N, and that discussions to change its structure had been initiated years ago.