Interbrew plumped for a sale of the Carling and Caffrey's brands after it was given the choice by the British government of that or a sale of the whole of Bass Brewers to end competition problems.
Credit Suisse First Boston upgraded its rating on the stock to 'buy' from the previous 'hold' and lifted its 2002 earnings forecasts for the company. The house also set an Eu30 price target for the stock.
Merrill Lynch was also positive on the stock, and reiterated an intermediate and long-term 'buy' for the shares. It also upped its 2002 earnings estimates for the group.
The disposal programme by Interbrew will leave it with the Bass Ale, Tennent's and Boddingtons brands plus the brewing operations in Scotland and Northern Ireland.
These businesses are expected to generate some 3.6m hectolitres of volume and more than Eu100m of ebitda, with the export business contributing a further Eu25m, according to Merrill Lynch.
Interbrew expects to grow ebitda for these units by "high single digits" as a result of operational improvements and greater top-line growth -- through a more aggressive push of Stella into Scotland.
Interbrew expects to sell the Carling Brewers operation by the end of this year and estimates that these operations will generate Eu240m (£151.93m) of ebitda. Analysts expect a price of about seven times ebitda, implying a price of about Eu1.68bn (£1.06bn).
Heineken is expected to be a willing buyer and confirmed it is still interested in buying Carling Brewers. South African Breweries is understood to have ruled itself out of the bidding. It was thought to have been interested in the whole of Bass Brewers rather than individual brands.
Merrill Lynch was basing its previous earnings estimates for Interbrew on the assumption that the British government would demand the divestment of the whole of Bass Brewers' UK assets.
The watered down ruling means that the investment house has now revised its forecasts and Merrill has moved its 2002 ebitda estimate from Eu1.54bn (£1bn) to Eu1.64bn. Clean earnings per share are now forecast to rise from Eu1.54 (98p) to Eu1.57 in 2002.
Credit Suisse First Boston upgraded its rating on the stock to 'buy' from the previous 'hold' and lifted its 2002 earnings forecasts for the company. The house also set an Eu30 price target for the stock.
Merrill Lynch was also positive on the stock, and reiterated an intermediate and long-term 'buy' for the shares. It also upped its 2002 earnings estimates for the group.
The disposal programme by Interbrew will leave it with the Bass Ale, Tennent's and Boddingtons brands plus the brewing operations in Scotland and Northern Ireland.
These businesses are expected to generate some 3.6m hectolitres of volume and more than Eu100m of ebitda, with the export business contributing a further Eu25m, according to Merrill Lynch.
Interbrew expects to grow ebitda for these units by "high single digits" as a result of operational improvements and greater top-line growth -- through a more aggressive push of Stella into Scotland.
Interbrew expects to sell the Carling Brewers operation by the end of this year and estimates that these operations will generate Eu240m (£151.93m) of ebitda. Analysts expect a price of about seven times ebitda, implying a price of about Eu1.68bn (£1.06bn).
Heineken is expected to be a willing buyer and confirmed it is still interested in buying Carling Brewers. South African Breweries is understood to have ruled itself out of the bidding. It was thought to have been interested in the whole of Bass Brewers rather than individual brands.
Merrill Lynch was basing its previous earnings estimates for Interbrew on the assumption that the British government would demand the divestment of the whole of Bass Brewers' UK assets.
The watered down ruling means that the investment house has now revised its forecasts and Merrill has moved its 2002 ebitda estimate from Eu1.54bn (£1bn) to Eu1.64bn. Clean earnings per share are now forecast to rise from Eu1.54 (98p) to Eu1.57 in 2002.
