CARLSBERG, the Danish brewing giant, is faced with raising its £7.3bn joint offer for Scottish & Newcastle in a matter of weeks or walking away, according to analysts.
But, whatever it chooses to do, the arbitration process to determine the future ownership of Baltic Beverages Holding in Russia, its joint venture with S&N, will continue.
After another week of aggressive exchanges between the two partners, Carls
berg was put on the defensive when S&N's senior management made a presentation to analysts and the media in Copenhagen. One source said the Danes, who are normally faithful to the Carlsberg empire, had begun to waver and accept that S&N was serious in its bid to prove that its 50-50 joint venture partner had triggered a so-called 'shotgun clause' in the deal. The clause allows one partner to bid for the other's stake if there is an attempt by one of them to acquire it.
S&N argues that Carlsberg has done that by launching its bid with Dutch giant Heineken to buy the Edinburgh-based company. Carlsberg last week appointed its own arbitrator to the tribunal in Stockholm which will determine the outcome, although it still claims the hearing is unnecessary.
But the company is coming under increasing pressure, the evidence of which is seen in its attempts to gag BBH management in a series of letters warning them not to disclose financial information about the Russian business.
Reports emanating from Amsterdam last week suggested Heineken was cooling on the 750p-a-share joint bid, alarmed by the way it has become embroiled in a fierce war of words. However, a spokesman for the consortium said "there was no truth in it whatsoever. There is no rift or disagreement."
S&N maintains that the bid grossly undervalues the company and takes little account of the growth potential of BBH. In a presentation in London last week, John Nicolson, managing director of developing markets, said: "We have built a formidable machine in Russia."
He repeated earlier forecasts that the company saw India as the next big growth market for S&N, deflecting claims that it is too reliant on Russia.
The full article contains 369 words and appears in Scotland On Sunday newspaper.
