Heineken N.V. ("Heineken") and Carlsberg A/S ("Carlsberg")
Shareholders must act to secure enhanced 780p offer - Consortium will
not go hostile - Offer of further disclosure on BBH
Amsterdam, 10 January 2008 - Heineken and Carlsberg (the
"Consortium") announce that on Wednesday, 9 January 2008 the
Consortium made a materially improved proposal to the Board of
Scottish & Newcastle plc ("S&N") (the "Further Increased Proposal").
The approach represented a decisive attempt by the Consortium to
engage in substantive discussions with S&N leading to the
announcement of a recommended transaction prior to the Takeover Panel
deadline of Monday, 21 January 2008 and to address concerns voiced by
S&N and some of its shareholders. The key points of the proposal
were:
* a material increase in the Consortium's proposed cash offer to
780 pence per share; representing an increase of 30 pence (£293
million) and an implied equity value of £7.6 billion and
enterprise value of £10.0 billion;
* the majority of the increase is being funded by Carlsberg and
hence the Further Increased Proposal implies a very full price
for BBH. The implied enterprise value for 50 per cent of BBH of
£4.2 billion represents a multiple of 16.6x 2007 EBITDA (the
EV/EBITDA multiple for 2006 is 21.1x);
* proposals by Carlsberg to provide the market with additional
disclosure on the financial position of BBH for 2008 - 2010;
* a significantly reduced scope of due diligence;
* confirmation that committed financing is in place for the Further
Increased Proposal; and
* a statement that the Consortium is only prepared to proceed with
an offer on a recommended basis*.
Despite the Consortium addressing all of the concerns expressed by
S&N regarding its previous proposals, the Board of S&N has again
rejected this increased proposal and declined to meet the Consortium.
Given the increased offer price, the Consortium has confirmed that it
is not prepared to proceed with an offer without the recommendation
of the Board of S&N*. The Consortium also believes that the
requirement for a recommended offer will prevent a prolonged period
of further uncertainty for all shareholders.
Without a recommendation there will be no offer by the Consortium and
the proposal will lapse*.
S&N shareholders are therefore urged to call immediately on the S&N
Board to enter into substantive dialogue with the Consortium to
ensure a recommended offer can be announced prior to the 21 January
2008 deadline imposed by the Takeover Panel.
The Continued refusal to engage by the S&N Board jeopardises
significant value creation for S&N shareholders:
* the Consortium's proposal is certain and in cash;
* the financing of the Further Increased Proposal is not
conditional on any due diligence;
* the share price on 28 March 2007, the date immediately before
speculation first arose around a possible offer for S&N, was 531
pence; and
* S&N has not demonstrated any deliverable alternative that comes
close to creating the same value as the Consortium bid.
Commenting, Jean-François van Boxmeer, Chairman of the Executive
Board and CEO of Heineken said:
"It is decision time for S&N shareholders. Without the S&N Board's
co-operation there will be no offer by the Consortium*. Our
increased 780p proposal is the only deliverable opportunity today for
shareholders to realise a material premium to the independent value
of S&N."
Jørgen Buhl Rasmussen, President and CEO of Carlsberg said:
"The Consortium's increased proposal represents a very generous
proposition to S&N shareholders by any measure. Carlsberg has
listened to shareholders and offered its co-operation with regards to
further disclosure on BBH's prospects and the Consortium's proposal
now implies a £4.2 bn value on S&N's 50% share of BBH. It's now over
to S&N shareholders to make their views clear to the S&N Board if
they want this transaction to happen."
Details of the Further Increased Proposal
The proposed price of 780p per share represents:
* a premium of 46.9% to the share price of 531 pence on 28 March
2007 (the date immediately before speculation first arose around
a possible offer for S&N);
* a multiple of 14.0x S&N's EV/EBITDA for the year ending 31
December 2006;
* an implied enterprise value of 50 per cent. of BBH of £4.2
billion, representing a multiple of 16.6x 2007 EBITDA (the
EV/EBITDA multiple for 2006 is 21.1x); and
* a value which is significantly in excess of the standalone value
of S&N.
It is intended that £244 million (25 pence per share) of the proposed
increase would be funded by Carlsberg and £49 million (5 pence per
share) by Heineken.
The Further 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.
The Further Increased Proposal remains subject to the following
customary pre-conditions:
* completion of limited confirmatory due diligence;
* the recommendation of the S&N Board*;
* the receipt of binding irrevocable undertakings in a form
acceptable to the Consortium to accept the offer from the
directors of S&N;
* 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; and
* final approval by the Boards of Carlsberg and Heineken.
Save for the recommendation of the S&N Board (which is a non-waivable
pre-condition), the above customary pre-conditions are waivable at
the discretion of the Consortium.
The Consortium, however, reserves the right to proceed without a
recommendation if an offer or possible offer for S&N is announced by
a third party.
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
to the Further Increased Proposal are satisfied or waived.
Carlsberg prepared to co-operate with S&N on increasing transparency
on BBH
Carlsberg has confirmed to S&N that it is willing to co-operate with
regard to providing the market with further financial disclosure on
the current trading and prospects of BBH. Subject to the agreement of
the Board of BBH, Carlsberg would be willing to offer its
co-operation with further disclosure on BBH via either of the
following alternatives:
* publication of a profit estimate for 2007 and forecast for 2008
for BBH, prepared and reported on to the appropriate standards
for a UK public offer; or
* release of a mutually agreed current trading and outlook
statement for 2008 - 2010.
The Board of S&N has not indicated any willingness to explore either
of these proposals, despite portraying as recently as 8 January 2008
its desire for additional disclosure in respect of BBH.
S&N Shareholder action required now
Without a recommendation there will be no offer by the Consortium,
the Consortium will walk away and the proposal will lapse*. It is
therefore essential for S&N shareholders to act now to call on the
Board of S&N to engage with the Consortium or risk losing significant
value.
* The Consortium reserves the right to proceed without a
recommendation if an offer or possible offer for S&N is announced by
a third party.
Press enquiries
Véronique Schyns
Tel: +31 (0)20 52 39 355
veronique.schyns@heineken.com
Investor and analyst enquiries
Jan van de Merbel
Tel: +31 (0)20 52 39 590
investors@heineken.com
