NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS IN THAT JURISDICTION
CARLSBERG A/S ("CARLSBERG") AND HEINEKEN N.V. ("HEINEKEN") - FULL AND FAIR
PROPOSAL MADE TO SCOTTISH & NEWCASTLE PLC
Carlsberg and Heineken (the “Consortium”) announce that they have today made an
increased proposal to the Board of Scottish & Newcastle plc (“S&N”) under which
the Consortium would offer to acquire S&N for 750 pence per share in cash (the
“Increased Proposal”). The Consortium believes it is important that S&N
shareholders are fully informed of the merits of the Consortium's Increased
Proposal in advance of S&N's trading update on 20 November 2007.
Key highlights of the Consortium's Increased Proposal are:
• a full and fair offer price of 750 pence per share in cash, valuing the group
at an equity value of £7.3bn and an enterprise value of approximately £9.7bn,
substantially in excess of the standalone independent value of S&N;
• an increase of 30 pence per share;
• a premium of 41% to the share price of 531 pence being the closing price on
28 March 2007 (the date immediately before speculation first arose around a
possible offer for S&N);
• a historic transaction multiple of 13.6x S&N's EBITDA for the year ended 31
December 2006 (materially higher than those paid by S&N for its recent major
acquisitions); and
• a high degree of certainty for S&N shareholders.
S&N Board recommendation and limited confirmatory due diligence continue to be
pre-conditions.
Commenting on the Increased Proposal, Jean-Francois van Boxmeer, Chairman and
CEO of Heineken said:
“The Increased Proposal represents a very attractive opportunity for S&N
shareholders to obtain a price which is materially higher than the standalone
value of the group. Heineken will act in a financially disciplined manner in
its pursuit of this transaction.”
Commenting on the Increased Proposal, Jørgen Buhl Rasmussen, CEO of Carlsberg
said:
“The Consortium's Increased Proposal of 750 pence per share offers S&N
shareholders the opportunity to secure a full and fair price for the entire
business. Carlsberg will only proceed with a transaction if it believes it is
in the interests of its shareholders.”
Following the S&N Board's cursory dismissal of the Consortium's initial
proposal and their refusal to engage in discussions to date, the Consortium has
decided to provide details of its increased and full and fair proposal directly
to the market. This will enable S&N shareholders to take this into account
when evaluating S&N's current trading and future strategy update on 20 November
2007.
With regard to current trading, the Consortium has noted S&N's statement on the
“challenging conditions” across Western Europe in its press release of 7
November 2007. S&N shareholders are reminded that Western Europe provides the
significant majority of S&N's revenues, operating profits and operating cash
flows.
The Consortium's Increased Proposal represents a 2006 EV / EBITDA multiple of
13.6x for the entire S&N group and compares very favourably to the prices S&N
has itself paid to create the group. S&N acquired Hartwall (including
Hartwall's 50% interest in BBH) in 2002 on a historic transaction multiple of
10.1x EBITDA. In 2003 S&N acquired the Centralcer business in Portugal for a
historic transaction multiple of 9.6x EBITDA and in 2000 S&N purchased the
Kronenbourg and Alken-Maes operations for a historic transaction multiple of
11.3x EBITDA.
The Increased Proposal continues to offer a high degree of certainty for S&N
shareholders, with:
- committed financing in place (due diligence is not a condition to the banking
facilities);
- a transaction structure that avoids any substantive anti-trust issues;
- the support of Carlsberg's and Heineken's controlling shareholders; and
- limited pre-conditions.
Under the Increased Proposal, the making of any offer would continue to be
subject to certain pre-conditions, all of which are waivable at the discretion
of the Consortium, and all of which the Consortium believes to be customary.
These pre-conditions continue to include satisfactory confirmatory due
diligence, the recommendation of the S&N Board and assurance from the trustees
of S&N's UK pension schemes regarding the level of contributions that Heineken
would be expected to make going forwards. The Consortium requires only limited
confirmatory due diligence access, in particular for verification of its
separation assumptions.
The Consortium notes the speculation about a possible sale of Elidis in France.
Whilst this may result in a short term financial gain for S&N, Carlsberg
believes that such a divestment may be detrimental to the valuation of the
French business. We would therefore encourage the S&N Board to postpone
entering into any binding agreement on such a divestment until Carlsberg has
had an opportunity to assess the full implications of such a divestment.
Under the Increased Proposal, the economic contributions by Carlsberg and
Heineken to Bidco will remain approximately 54% and 46% respectively.
The Consortium notes that since the release of the BBH quarterly results on 7
November 2007, S&N has requested that Carlsberg consent to the release of
additional forecast financial information relating to BBH over and above the
level of information that BBH has historically been comfortable releasing at
the time of publication of the Q3 results. Carlsberg has made clear that it
continues to support the level of disclosure which in the past both S&N and
Carlsberg had felt was appropriate, ensuring the highest standards of corporate
governance and protecting the ongoing interests of the BBH group. However,
subject to obtaining the consent of the BBH Board, Carlsberg has offered to
cooperate with S&N in the provision of the necessary BBH information required
to prepare and report on a consolidated profit forecast for the S&N Group as a
whole for 2007 and 2008. Whilst the release of a S&N consolidated profit
forecast is a matter for the Board of S&N, it would, in the view of Carlsberg,
provide substantial further information for the market whilst not jeopardising
the interests of BBH.
This announcement does not constitute an announcement of a firm intention to
make an offer under Rule 2.5 of the Code. There can be no certainty that any
offer will be made even if the pre-conditions referred to above are satisfied
or waived.
The Consortium looks forward to the opportunity to meet with the S&N Board to
progress to announcing a full recommended offer as soon as practicable.
Enquiries
Public relations advisers to the Consortium
Finsbury Group Tel: +44 20 7251 3801
James Leviton
Guy Lamming
Carlsberg:
Jens Peter Skaarup (Danish Media) Tel: +45 3327 1417
Mikael Bo Larsen (Investor Relations) Tel: +45 3327 1223
Financial adviser and Corporate Broker to the Consortium and to Carlsberg
Lehman Brothers Tel: +44 20 7102 1000
Adrian Fisk
Henry Phillips
Ed Matthews (Corporate Broking)
Financial adviser and Corporate Broker to the Consortium and to Heineken
Credit Suisse Tel: +44 20 7888 8888
Bertrand Facon
Stuart Upcraft
James Leigh Pemberton (Corporate Broking)
Sources and bases:
• Closing prices and exchange rates are sourced from Factset
• S&N's 2006 EV/EBITDA multiple is based on an enterprise value calculated as:
a. the equity value based on an offer price of 750 pence per share and fully
diluted share capital of 974.6 million comprising 946.6 million shares in issue
as stated in S&N's total voting rights announcement released on 12 November
2007 and 28m options as at 31 December 2006 sourced from S&N's 2006 annual
report; plus
b. the sum of (i) S&N's financial net debt as at 31 December 2006 of £1,912
million sourced from S&N's 2006 annual report, (ii) £221 million being 50% of
BBH net debt as at 31 December 2006, sourced from S&N's 2006 preliminary
results presentation and converted into sterling at the euro sterling exchange
rate of 0.6738 as at 31 December 2006 sourced from Factset, (iii) net pension
deficit of £280 million sourced from S&N's 2006 annual report, (iv) £74 million
being the proceeds from options and cash proceeds from shares held in trusts as
per S&N's 2006 annual report, and (v) minority interests in joint ventures of
£77 million and minority interests in associates of £1 million sourced from
S&N's 2006 annual report.
• S&N's 2006 EBITDA of £715 million is sourced from S&N's 2006 annual report.
• The reference to the S&N/Kronenbourg and Alken-Maes multiple of 11.3x EBITDA
is sourced from the S&N and Danone investor presentation dated 20 March 2000
titled "A Major European Brewing Group".
• The reference to the S&N/Hartwall multiple of 10.1x EBITDA is sourced from
the S&N and Hartwall investor presentation dated 14 February 2002 titled "A
Major International Brewing Group".
• The reference to the S&N/Centralcer multiple of 9.6x is sourced from the S&N
investor presentation dated 13 May 2003 titled “International Beer Development
- Portugal”.
Lehman Brothers Europe Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively as financial
adviser and corporate broker to the Consortium and Carlsberg and no one else in
connection with the possible offer referred to in this announcement and will
not be responsible to anyone other than the Consortium and Carlsberg for
providing the protections afforded to clients of Lehman Brothers Europe Limited
nor for providing advice in relation to this announcement or any matter
referred to herein.
Credit Suisse, which is authorised and regulated by the Financial Services
Authority, is acting exclusively for the Consortium and Heineken and no one
else in connection with the possible offer referred to in this announcement and
will not be responsible to anyone other than the Consortium and Heineken for
providing the protections afforded to clients of Credit Suisse nor for
providing advice in relation to this announcement or any matter referred to
herein.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any
person is, or becomes, "interested" (directly or indirectly) in 1% or more of
any class of "relevant securities" of S&N plc, all "dealings" in any "relevant
securities" of that company (including by means of an option in respect of, or
a derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30 pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the offer becomes, or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the "offer period"
otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an "interest" in
"relevant securities" of S&N plc, they will be deemed to be a single person for
the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of S&N plc by Carlsberg or Heineken or S&N, or by any of their
respective "associates", must be disclosed by no later than 12.00 noon (London
time) on the London business day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities
in issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on
the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a “dealing” under Rule 8, you should consult the Panel.
This announcement is not intended to and does not constitute or form part of an
offer or the solicitation of an offer to subscribe for or buy or an invitation
to purchase or subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction
Carlsberg is one of the leading brewing groups in the world, with a large
portfolio of beer and soft drinks brands. Its flagship brand - Carlsberg - is
one of the fastest-growing and best-known beer brands in the world. More than
30,000 people work for Carlsberg at 92 local production sites in 48 countries,
and its products are sold in more than 150 markets. In 2006 Carlsberg sold more
than 100 million hectolitres of beer, which is about 83 million bottles of beer
a day. Find out more at www.carlsberggroup.com.
CARLSBERG A/S AND HEINEKEN N.V. - FULL AND FAIR PROPOSAL MADE TO SCOTTISH & NEWCASTLE PLC
| Source: Carlsberg A/S
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