S&N rejects Carlsberg, Heineken offer

By David Jones and Jonathan Cable

LONDON (Reuters) - Britain's biggest brewer Scottish & Newcastle SCTN.L rejected a 6.8 billion-pound ($14 billion) bid on Thursday from Carlsberg (CARLb.CO: Quote, Profile, Research, Stock Buzz) and Heineken (HEIN.AS: Quote, Profile, Research, Stock Buzz) calling it a derisory bid to buy the business on the cheap.

The Danish and Dutch brewers' offer of 720 pence in cash is below S&N's share price, which spiked last week when Carlsberg and Heineken were forced to reveal they were planning a bid, and is short of the 800p which some analysts say could seal a deal.

The Edinburgh-based brewer's response came after it received a private letter from the chief executives of Carlsberg and Heineken at around midday with a proposal which was conditional on a S&N board recommendation and extensive due diligence.

"This unsolicited and derisory proposal is an effort to get S&N's unique portfolio of businesses on the cheap," S&N Chairman Brian Stewart said in a statement. "We will continue to take all actions to maximize shareholder value. I strongly urge shareholders to take no action."

Shares in S&N, Britain's last big independent brewer and number six in the world, closed off 0.5 percent at 758-1/2p. Carlsberg shares were suspended up 1.9 percent at 688 Danish crowns. Heineken shares ended up 1.6 percent at 47.32 euros.

"We believe that the 720p offer is merely an opening shot from Carlsberg and Heineken, and they will return with a higher offer," said analyst Sam Hart at brokers Charles Stanley.

"A bid in excess of 820p could be justified, and the board would be obliged to consider any offer above 800p," he added.

Analyst Matthew Webb at Cazenove added: "We see the 720p offer price as disappointing...we continue to believe that an offer of around 800p will ultimately be forthcoming."