S&N on course for £100m-a-year BBH synergy benefits

Scottish & Newcastle (S&N) has claimed it will accrue savings worth £100m a year if it wins full control of Baltic Beverage Holdings (BBH), the Eastern European joint venture it operates with Carlsberg.

The brewer said the savings would comprise both cost and revenue synergies and would "involve little disruption to the businesses and at limited cost".

In a hard-hitting statement issued today it claimed Carlsberg, which along with Heineken has launched an indicative offer for S&N, "has misused confidential information, has breached its duty of loyalty and other express provisions in the [BBH shareholder] agreement, has circumvented the 'shotgun' and its actions will damage the joint venture".

S&N said it was confident its arbitration claim would succeed and it would have the right to buy out BBH. There was "significant additional value" for the group's shareholders from it being able to control the venture "against the value implied in the consortium offer".

Said S&N chief executive John Dunsmore: "Carlsberg's desire to terminate the BBH joint venture by circumventing the BBH shareholders' agreement provides a huge opportunity for us to take control of BBH through a successful arbitration process.

"We have studied the implications closely with our advisers and believe that this would be in the best interests of our shareholders. Controlling BBH would make S&N one of the most attractive international beverage businesses."

While roundly defending S&N's defensive position, Dunsmore added: "While the consortium continues to seek to acquire S&N's unique portfolio of assets on the cheap, we are continuing to explore fully every option to deliver shareholder value."

Carlsberg was unavailable for comment at the time of writing.