LONDON (AFP) — British brewer Scottish and Newcastle on Wednesday reacted angrily to news of a potential joint takeover offer from Danish beer group and business partner Carlsberg, and Dutch peer Heineken.
Scottish and Newcastle, whose top-selling beverages include Foster's, Kronenbourg 1664, John Smiths and Strongbow, said that a possible break-up bid was "unsolicited and unwelcome."
However, the company's share price jumped by almost a fifth as analysts praised the strategic benefits of a deal.
"Carlsberg and Heineken confirm that they are in discussions regarding the formation of a consortium to make an offer for the entire issued share capital of Scottish and Newcastle," the pair said in a statement earlier Wednesday.
The beer giants said they have not made any formal approach, adding that any potential takeover offer would likely be in cash.
In response, S and N released a terse statement noting the development and making clear its animosity towards a takeover.
"The proposed break-up bid from Heineken and Carlsberg, the company's joint venture partner in BBH (Baltic Breweries), is unsolicited and unwelcome," S and N said in a statement which urged shareholders to take no action.
"S and N is confident in its future as an independent group with a combination of strong growth in emerging markets and cash generation in developed markets."
In London trade, the group's share price jumped 19.32 percent to 759.50 pence, giving it a stock market capitalisation of 7.14 billion pounds (10.2 billion euros, 14.5 billion dollars).
The Baltic Beverages Holding (BBH) joint venture, currently run by Carlsberg and Scottish and Newcastle, focuses on eastern Europe and Russian markets.
The Carlsberg-Heineken statement continued: "It is currently intended that Carlsberg will ultimately acquire Scottish and Newcastle's interests in BBH, France and Greece, and that Heineken will ultimately assume control of Scottish and Newcastle's business in the UK and other European markets."
Analyst Richard Withagen at SNS Securities said the Heineken-Carlberg takeover of S and N looked strategically sound.
"I think from a strategic point of view it's obviously a good deal for Heineken and Carlsberg," Withagen said.
"Heineken would gain market leadership in the UK and become the number two in Belgium and Portugal, and a leading market player in Finland.
"In addition, and more importantly, will be the economies of scale. They would have much higher volumes and this would enable them to lower their cost base significantly," he said.
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