S&N opens its books to bidders

Scottish & Newcastle has agreed to open talks with the consortium formed by rival brewers Carlsberg and Heineken over a possible takeover. A formal deal is likely to be tied up before the end of next week.

Carlsberg and Heineken have agreed in principle to raise their bid to 800p a share, the level at which S&N had indicated it would open its books to the consortium. At that level, a bid would value S&N's business at around £7.8bn.

S&N confirmed it had "entered into discussions in relation to a possible recommended offer", but "shareholders should be aware that there can be no certainty that a formal offer will be made."

The parties have asked the Takeover Panel for an extension to the 'put up or shut up' deadline imposed on Carlsberg and Heineken to table a formal bid by three days, to 12 noon on January 24, to enable due diligence.

S&N had rejected three previous informal approaches, with an acrimonious war of words between S&N and Carlsbeg, who are partners in the Russian BBH brewing operation.

Under the deal thrashed out between the two bidders, Carlsberg would take over S&N's stake in BBH, as well as the Kronenbourg business in France and Mythos in Greece. Heineken will take control of S&N's UK and other European operations, which includes the Foster's and John Smith's brands, and the Bulmers cider operation.