AS we predicted last week, Carlsberg managed to find a further £200m to match the Scottish & Newcastle board's valuation of the company and get the two warring sides around the table to thrash out what is expected to become a £7.8bn takeover.
After such an acrimonious battle they are hardly likely to kiss and make up, but at least they are now talking and the marriage is back on. With just four days to reach agreement before a new deadline expires most analysts now see this as a done deal
, though the possibility of a third party, or more than one third party, gatecrashing the expected celebrations, cannot be discounted.
The odds are shortening on a rival emerging with a stronger hand to trump the anticipated 800p offer from Carlsberg-Heineken, probably from America or, as we report on page one today, Japan.
Anheuser-Busch, best known for Budweiser, has been linked with S&N for years and certainly since the takeover battle kicked off last year. SABMiller is another likely to be watching developments this week. Until now, no one has looked beyond these two – apart from the possibility of private equity interest in acquiring the Russian business. Asahi and Kirin, two Japanese brewers, may just have a few aces to play before this particular game is over.
Once Carlsberg and Heineken have named their price, and the finances of the Carlsberg-S&N joint venture in Russia are placed on the table, other parties will decide whether to come in with an improved offer. The game is not over just yet.
The eventual outcome should be a positive one for shareholders, again as we said last week. Should S&N fall to Carlsberg-Heineken it will do so at a price that the Edinburgh company's board has demanded. It said the Danish-Dutch duo were trying to buy Baltic Beverages Holding – the Russian business – on the cheap. After four attempts, Carlsberg now appears to agree that the consortium could cough up the extra £1bn on top of its first offer of 720p.
Should the consortium choose to walk away – and it looks unlikely after getting this far – then S&N will do its own deal. News of a withdrawal would prompt the shares to fall, but a new arrangement should restore value.
Whatever emerges in the end, Britain's biggest and last remaining major brewer will pass into foreign hands and another Scottish icon will be wiped from the listed sector.
It is, to that extent, a momentous event, perhaps a regrettable one. While S&N has not been short of enemies over the years and has been accused in the past of squandering opportunities, the loss of the company from the share register and from the dwindling number of large headquartered companies north of the border may have further repercussions, not least on jobs and on Scotland's reputation as a corporate body.
Interestingly, nobody in Scotland chose to play the patriotic card or make knee-jerk demands for the government to defend the company from foreign predators. Decision-making may be transferring overseas, but at least the country has been grown up enough to understand that this is how things work in the global economy.
Private solution to Rock debacle
A PRIVATE sector solution to the Northern Rock crisis has edged closer with Gordon Brown sending messages from China that even if some form of public ownership is adopted, the Government is set on eventually passing it back into private hands. A decision of some sort is now expected as early as tomorrow.
Paul Thompson's appointment as a non-executive director and possible chief executive, suggests the board is getting ready for a new life as an independent company. Thompson, the former Britannic boss who split with Clive Cowdery while heading up Resolution, would work with Rock chairman Bryan Sanderson on a slimmed down company which they believe has the ability to pay back the Bank of England loans on its own.
Sir Richard Branson and Luqman Arnold who head the Virgin and Olivant bids needed to prove they have sufficient capital support, though Royal Bank of Scotland and Citigroup can apparently offer loans of up to £15bn, in spite of the credit crunch. Meanwhile, the government's adviser, Goldman Sachs, has sought financing options which would avoid the need for nationalisation.
It would appear that they may have succeeded and that the debt will be parcelled up into bonds to be sold to investors. It will bring the Rock crisis closer to a conclusion and also help to get Chancellor Alistair Darling off the hook.
However, this week he is also expected to make a statement on his capital gains tax reforms and with few changes anticipated to his autumn announcement he may find himself back in the firing line.
