UK: Scottish & Newcastle shares rise on report of possible takeover

Shares of Scottish & Newcastle PLC rose more than 5 percent Monday after a report that Diageo PLC and SABMiller PLC held talks about a possible bid for and breakup of the brewer, Associated Press reported April 23.

The Financial Times reported that talks centered on a plan for SABMiller to make a bid of 710 pence ($14.22) a share, for the brewer. Including debt, the deal would be worth about 9 billion pounds ($18.03 billion).

Diageo would then buy S&N's U.K. beer business, which includes brands such as Newcastle Brown Ale and John Smith's, and sell off the French operations – possibly to a private equity buyer, the newspaper said.
According to the report, SABMiller would retain S&N's other international assets, including its 50 percent share of Russia's Baltic Beverages Holding – a joint venture with Carlsberg.

The deal has been disrupted by the recent rise in S&N's share price, the report said.

“This is media speculation,” said Isabelle Thomas, a spokeswoman for Diageo. “We don't comment on media speculation.”

Representatives for SABMiller weren't immediately available for comment. Scottish & Newcastle spokesman Rob Ballantyne described the FT report as “no more than media speculation” and declined to comment further.

Scottish & Newcastle shares climbed 5.1 percent to 600.5 pence ($12.05) in London.