Scottish Courage may close its Newcastle brewery and have the iconic Newcastle Brown Ale brewed by the Federation brewery in Gateshead instead, City analysts are suggesting. Rumours that the parent company, Scottish & Newcastle, was considering closing one of its five UK breweries to save costs, allied with suggestions that there might be a bid for the whole group from a company such as Diageo or AlliedDomecq, sent S&N's shares up as much as 8% in afternoon trading, before they closed up 24.5p, more than 6%, at 413.5p. S&N said it had no plans to close any brewery, but it confirmed that it was "reviewing its options", after Credit Suisse First Boston said the company could add £25m to annual profits by closing one of its five UK breweries . S&N, which brews in Edinburgh, Newcastle, Manchester, Tadcaster and Reading, said: "We are looking to be as efficient as we possibly can be, but there are lots of ways to do that. "It does not simply mean we are looking to close a brewery. We are certainly planning to look at every option open to us during the next year, but at the moment any single idea is simply speculation." However, Tony Froggatt, S&N’s new chief executive, is known to believe the company’s UK cost base is too high, and one insider has confirmed that the issue of whether it needs to have five breweries has been raised. Almost any brewery closure is likely to be controversial however, with the Royal brewery in one of Manchester's poorer districts, the Edinburgh brewery being clsoe to corporate headquarters, the Newcastle brewery making the widely-loved Brown Ale historic roots and the John Smith's brewery in Yorkshire being home to one of the country's biggest cask ales.