UK: S&N argues case for BBH control
Scottish & Newcastle has outlined its claim to full-ownership for Baltic Beverages Holding, the brewer's joint venture with Carlsberg.
In a filing to the Arbitral Tribunal in Stockholm, issued today (8 January), the UK-based company has claimed that Carlsberg has "misused confidential information, has breached its duty of loyalty and other express provisions in the (Shareholders') Agreement, has circumvented the 'shotgun' and its actions will damage the joint venture".
S&N said it can see "significant additional value" for its shareholders from controlling BBH against the value implied in the proposed takeover offer from Carlsberg and Heineken. The two European brewers have tabled a proposed bid of GBP7.50 per share in S&N, an offer that has been dismissed outright by the UK company.
"While the consortium continues to seek to acquire S&N's unique portfolio of assets on the cheap, we are continuing to explore fully every option to deliver shareholder value," said S&N's CEO, John Dunsmore. "Carlsberg's desire to terminate the BBH joint venture by circumventing the BBH shareholders' agreement provides a huge opportunity for us to take control of BBH through a successful arbitration process."
In making the claim to the tribunal, S&N has forecast synergies of around GBP100m (US$197.6m) per year, were it to take full control of BBH. While capturing synergies would involve little disruption to the businesses and at limited cost, S&N also said that it would gain both cost and revenue synergies with the move.
"We have studied the implications closely with our advisers and believe that this would be in the best interests of our shareholders," Dunsmore added. "Controlling BBH would make S&N one of the most attractive international beverage businesses."
The Arbitral Tribunal has set a date of 3 July for a final, binding decision. Carlsberg has said that it believes it has a strong argument against S&N's accusations.
Carlsberg and Heineken have been given until 21 January to make a formal offer for S&N by the UK Takeover Panel. Should the European brewers not make a formal offer, then thereafter, neither Carlsberg nor Heineken would be permitted to make a bid for six months.
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