Overview: lager wars

It’s the bid battle that few other than the bankers are toasting. Carlsberg
and Heineken are ‘in a round’ to jointly bid for
Scottish &
, producer of beers Kronenbourg and Foster’s.

S&N is shaping up to oppose what it sees as a hostile bid, saying it
would be ‘unsolicited and unwelcome’. And the deal is likely to see a big
falling out between Carlsberg and S&N, hitherto the best of drinking pals.

For S&N group finance director Ian McHoul and the other board members,
the drinks are also on ice, after life just got a whole lot busier.

What’s happened?

Reports in recent weeks have suggested that Carlsberg and Heineken would make
a joint bid for the UK brewer, which has grown from a regional business to a
multinational with a welter of global brands in 20 years.

Bid speculation has been stirred up into a veritable froth in recent months,
with Anheuser-Busch and SABMiller also linked to an approach.

The markets lapped up the shares on further speculation last week, with S
&N’s share price rocketing 20% to 760p. The analysts suggest an imminent
800p bid, valuing the company at £7.5bn.

What’s going to happen?

Carlsberg and S&N run a joint venture, Baltic Beverages Holding, which is
classed as extremely desirable commodity by Carlsberg and other brewers. But
complicating matters is the existence of a ‘shoot-out’ clause between the two. A
bid by one of the parties allows the other half to make a more attractive bid,
and win full control.

For McHoul, who has amassed more than 70,000 shares in the company since he
joined in 2001, a deal at that price could see him take home a cool half a
million pounds. That’s the glass half-full view.

The half-empty view is that a break-up of the company could see him and other
directors out of a job.

There is the possibility that he could be looking for a new project anyway,
after he was overlooked for the chief exec’s role last month following Tony
Froggatt’s decision to leave on 1 November.

McHoul was ignored in favour of another internal candidate, its Western
European boss John Dunsmore.

But he has previously shown loyalty. McHoul lined up for the top job even
earlier, prior to Frogatt’s appointment in 2003, and has stayed nonetheless.

He will be wondering now, when this latest bid battle is all over, will he be
drinking to a job well done, or drowning his sorrows?

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