Blog: Olly WehringWill Carlsberg spot an S&N opening?

Olly Wehring | 3 July 2007

What will be the city's reaction to S&N's trading statement today and their upcoming interim results in August?

The UK brewer said that poor weather and tough comparisons with last year's football World Cup months has hit its first half. Although it claims it will still make its full-year expectations across the group, S&N said today (3 July) that the UK beer market slipped by 5% in the first six months of this year.

Would an unfavourable reaction by the city to this admission of underperformance spark action from Denmark and prompt Carlsberg to launch its long-awaited takeover of the UK-based rival? It's an interesting one. As reported on these pages earlier, Dresdner Kleinwort now believes a bid from Carlsberg is a 70% likelihood.

I am not so sure.

Were it just a case of getting its hands on its S&N joint venture Baltic Beverages Holding, no doubt the Danish group would already have leapt in. But you can't help but feel that the Copenhagen-based boardroom is scratching its collective head about whether it wants to be saddled with S&N's mature market business - primarily the UK and France.

When you start to think about it this way, then the possibility of a joint bid for S&N presents itself, perhaps alongside a private equity partner. There is plenty about S&N's Western European business that might be attractive to private equity - strong brands and strong cash flow for starters. If enough cost could be stripped from the business and efficiencies found, a re-invigorated company or set of brands could emerge from the process, ready to be sold back to the trade.


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