Denmark & Netherlands: Heineken & Carlsberg raise bid for S&N till £7.3 billion, S&N rejects the offer

Heineken and Carlsberg (the “Consortium”) announce that they have 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”), according to companies’ releases, November 15. 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.”

Scottish and Newcastle said the same day it had rejected the improved 7.3-billion-pound ($14.9 billion) bid proposal from Denmark's Carlsberg and Dutch group Heineken, according to company’s press release, November 15.

The Board, having consulted its advisers, has no hesitation in rejecting this wholly inadequate proposal as it substantially undervalues the unique strengths and market positions of S&N. The Board is particularly concerned by Carlsberg's continuing refusal to disclose relevant information about BBH's prospects which is essential, in the current circumstances, to allow S&N's shareholders to assess the proper value of BBH.

Sir Brian Stewart, Chairman of S&N, commented: "Carlsberg and Heineken's marginally increased proposal continues their attempt to get S&N's unique portfolio of businesses on the cheap. The Board is highly confident in the actions being taken to maximise shareholder value, and strongly urges shareholders to take no action."

John Dunsmore, Chief Executive of S&N, commented: "The consortium's proposal significantly undervalues S&N's brands and market positions. We particularly object to Carlsberg's refusal to allow agreed information about BBH's prospects to be released."

As required by the Takeover Code, S&N confirms that this announcement is not being made with the agreement or approval of Carlsberg or Heineken. For the avoidance of doubt, there can be no certainty that this approach will lead to an offer being made for S&N or as to the terms on which any offer might be made. Rothschild and FIH Partners have been advising S&N in regard to BBH. UBS and Deutsche Bank continue to advise the Company on all financial matters.

16 November, 2007