Scottish & Newcastle (S&N) has said it believes it can achieve £100m of cost and revenue synergies through gaining outright control of Baltic Beverages Holding (BBH), its Russian joint venture with Carlsberg.
The ownership of BBH has become a significant part in S&N’s defence against a 750p a share joint takeover bid from Carlsberg and Heineken, which would value the UK brewer at £9.7bn including debt.
The UK brewer made the statement as it announced it had submitted a detailed claim to the Arbitral Tribunal in Stockholm, arguing that the bid approach breaches its agreement with Carlsberg over their ownership of BBH.
A court decision is due by 3 July.
S&N said it was confident that its claim would be successful and that it would have the right to acquire Carlsberg’s 50% stake in BBH at fair market value.
It said it envisaged introducing a minority partner to take up a 25% stake in BBH, if its claim is successful, while the remaining financing of the deal would come from additional borrowing and disposals.
The company also said that the increased exposure to growth markets through complete ownership of BBH would give it the opportunity to participate in further industry consolidation, enhance its sales growth, and give it a higher overall margin profile.
John Dunsmore, chief executive of S&N, said: “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’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.”
The Takeover Panel has given Carlsberg and Heineken until 21 January to make a formal bid for S&N.
