Recommended Cash Offer for Scottish & Newcastle plc by Sunrise
Acquisitions Limited (a company jointly owned by Heineken and
Carlsberg)
Summary
* The boards of Sunrise Acquisitions Limited ("BidCo") and Scottish
& Newcastle plc ("S&N") announce that they have reached agreement
on the terms of a recommended cash offer to be made by BidCo, a
newly incorporated company jointly owned by Carlsberg A/S
("Carlsberg") and Heineken N.V. ("Heineken") for the entire
issued and to be issued share capital of S&N (the "Offer").
* Under the terms of the Offer, Scheme Shareholders will receive
800 pence in cash for each S&N Share. The Offer will be
implemented by way of a court-sanctioned Scheme of Arrangement
(the "Scheme").
* The Offer values S&N's entire existing issued share capital at
approximately £7.6 billion and the entire issued and to be issued
share capital at approximately £7.8 billion. No final dividend
will be payable.
* The Offer of 800 pence per S&N Share represents:
- a premium of 50.7 per cent. to the Closing Price of
531 pence per S&N Share on 28 March 2007, being the date immediately
before speculation first arose around a possible offer for S&N;
- a premium of 25.7 per cent. to the Closing Price of
637 pence per S&N Share on 16 October 2007, being the last Business
Day prior to Carlsberg and Heineken announcing that they were in
discussions regarding the formation of a consortium to make a
possible offer for S&N; and
- a multiple of 14.3x S&N's EBITDA for the year ended
31 December 2006.
*
* S&N and Carlsberg have agreed to release projected information
for BBH for 2008 - 2010 as set out in this announcement.
* Following completion of the Offer, S&N's share of BBH, as well
as the French, Greek, Chinese and Vietnamese operations will be
transferred to Carlsberg. Heineken will continue to hold the
remaining businesses, principally the UK and Ireland,
Portuguese, Finnish, Belgian, US and Indian operations. The
businesses will be separated as soon as possible and in any
event within 12 months after the Effective Date.
* The Offer has compelling strategic rationale for both Carlsberg
and Heineken.
* For Carlsberg, it is a transformational transaction which will
deliver a major increase in its operational scale and long term
growth prospects, resulting in the creation of the world's
fastest growing global beer company. The principal benefits
are:
* gaining full control of BBH, Carlsberg's key growth asset;
* further increasing Carlsberg's exposure to attractive growth
markets;
* enhancing Carlsberg's position in Western Europe with
complementary businesses in France and Greece;
* scale benefits, allowing the generation of significant synergy
benefits based on reductions in overheads, implementation of
best brewing practices and purchasing savings;
* enhancing Carlsberg's brand portfolio by adding premium brands
with strong local and international potential; and
* expanding Carlsberg's Asian platform in the attractive Chinese
and Vietnamese markets.
* For Heineken, the transaction will provide undisputed
leadership in Europe and significant opportunities in
profitable markets to grow the premium Heineken brand. The
principal benefits are:
* the acquisition of excellent platforms for future growth;
- extensive new distribution and portfolio platforms
in the UK and other markets to drive premium Heineken brand growth;
- strong, complementary brands with international
appeal and potential (Newcastle Brown Ale, Foster's, Strongbow
cider); and
- access to the UK cider market, which is growing at
18.6 per cent. p.a.;
* leadership positions in key European markets;
- number 1 in the UK and number 2 positions in the
key markets of Portugal, Ireland, Finland and Belgium which are
stable, profitable markets;
- Heineken has a strong track record in creating
value in mature markets through innovation, brand portfolio
strategies and rigorous efficiency programmes;
* a step-change in revenue growth, driving sizeable, reliable
cash flow and profit streams to support future expansion;
* greater exposure to developing markets and segments, with
positions in India and the US import market;
* estimated annual synergies of £120 million by year four with 70
per cent. in costs and 30 per cent. in revenues; and
* optimisation of Heineken's capital structure.
* The Scheme Document, containing further information about the
Offer, will be posted to S&N Shareholders as soon as
practicable. The Scheme will be put to Scheme Shareholders at
the Court Meeting and the EGM.
* The Offer is subject to the approval of Heineken and Heineken
Holding N.V. ("Heineken Holding") shareholders. S&N has
received irrevocable undertakings from the controlling family
shareholders in respect of all of their own beneficial holdings
of Heineken shares and Heineken Holding shares to vote in
favour of (or procure the voting in favour of) any such
resolutions that may be necessary to approve, effect and
implement the Offer by BidCo to be proposed at the Heineken
Shareholders' Meeting and the Heineken Holding Shareholders'
Meeting.
* The approval of the European Commission and certain other
competition authorities will also be required. Subject to the
satisfaction of the Conditions, it is expected that the Scheme
will become effective during Q2 2008.
* The directors of S&N, who have been so advised by Deutsche
Bank, Rothschild and UBS, consider the terms of the Offer to be
fair and reasonable. In providing their advice, Deutsche Bank,
Rothschild and UBS have taken into account the commercial
assessments of the directors of S&N. Accordingly, the directors
of S&N intend unanimously to recommend that S&N Shareholders
vote in favour of the Scheme and the resolutions at the Court
Meeting and the EGM, as the directors have undertaken to do as
further described below.
* BidCo has received irrevocable undertakings to vote in favour
of (or procure the voting in favour of) the Scheme and the
resolutions at the Court Meeting and the EGM from the directors
of S&N in respect of all of their own beneficial shareholdings
of S&N Shares amounting, in aggregate, to 9,531,441 S&N Shares,
representing approximately 1.0 per cent. of S&N's entire
existing issued share capital. These undertakings will remain
binding in the event of a competing offer being made for S&N.
* BidCo has also received an irrevocable undertaking to procure
the voting in favour of the Scheme and the resolutions at the
Court Meeting and the EGM from Hartwall Capital OY in respect
of 86,710,607 S&N Shares, representing approximately 9.2 per
cent. of S&N's entire existing issued share capital. This
undertaking will lapse if a third party announces, prior to 5
p.m. on the day which is 20 days after the despatch of the
Scheme Document, a firm intention to make an offer with a value
of not less than 850 pence per S&N Share. The 9,055,859 S&N
Shares beneficially owned by Erik Hartwall and Henrik Therman
are not included in such undertaking but, as directors of S&N,
they have given undertakings in respect of these shares as
referred to above.
Commenting on the Offer, Jorgen Buhl Rasmussen, President and CEO
of Carlsberg, said:
"This is a truly transformational transaction for Carlsberg. In a
single step we have created the world's fastest growing global
brewer. We now have full control of our destiny in Russia and
other BBH territories and I am truly excited about the new
opportunities this will present to us."
Commenting on the Offer, Jean-François van Boxmeer, Chairman and
CEO of Heineken, said:
"This is a significant strategic step for Heineken. It gives us
undisputed leadership in Europe and creates significant
opportunities in profitable markets to grow the premium Heineken
brand. Our proven ability to create value from mature markets
coupled with the step-change in revenue growth will drive our
future expansion. I look forward to welcoming the Scottish &
Newcastle employees into our business and learning from their
unique experience and skills."
Commenting on the Offer, Sir Brian Stewart, Chairman of S&N, said:
"The management and employees of S&N have built a group with strong
brands enjoying leading positions in both mature markets in Western
Europe and growing emerging markets. These emerging markets
include those covered by BBH, the prospects of which shareholders
will be better placed to assess as a result of today's
announcement. The S&N Board believes that the Consortium's offer
delivers a fair value for S&N, reflecting its growth prospects, and
will be recommending that shareholders accept."
Carlsberg is hosting an analyst presentation at 9.00 a.m. (London
time) at the City Presentation Centre, 4 Chiswell Street, London
EC1Y 4UP. The analyst presentation will be webcast live and can be
accessed via Carlsberg's corporate website at
www.carlsberggroup.com. To participate in the live question and
answer session to be held after the presentation, analysts should
dial +44 20 8515 2301. The webcast of the analyst presentation
will also be available via Carlsberg's corporate website at
www.carlsberggroup.com.
Heineken is hosting an analyst presentation at 10.00 a.m. (London
time) at the City Presentation Centre, 4 Chiswell Street, London
EC1Y 4UP. The analyst presentation will be webcast live and can be
accessed via Heineken's corporate website at
www.heinekeninternational.com. To participate in the live question
and answer session to be held after the presentation, analysts
should dial +44 20 7190 1232. The webcast of the analyst
presentation will also be available via Heineken's corporate
website at www.heinekeninternational.com.
Heineken is hosting a press conference at 11.30 a.m. (London time)
at the City Presentation Centre, 4 Chiswell Street, London EC1Y
4UP. The press conference will be webcast live and can be accessed
via Heineken's corporate website at www.heinekeninternational.com.
To participate in the live question and answer session to be held,
members of the press should dial +44 20 8515 2378. The webcast of
the press conference will also be available via Heineken's
corporate website at www.heinekeninternational.com.
Carlsberg is hosting a press conference at 12.15 p.m. (London time)
at the City Presentation Centre, 4 Chiswell Street, London EC1Y
4UP. The press conference will be webcast live and can be accessed
via Carlsberg's corporate website at www.carlsberggroup.com. To
participate in the live question and answer session to be held,
members of the press should dial +44 20 7190 1232. The webcast of
the press conference will also be available via Carlsberg's
corporate website at www.carlsberggroup.com.
Carlsberg is hosting a conference call at 2.00 p.m. (London time)
for analysts and investors with audio webcast. To participate in
the conference call, analysts and investors should dial +1 480 248
5081.
Heineken is hosting a conference call at 3.00 p.m. (London time)
for analysts and investors with audio webcast. To participate in
the conference call, analysts and investors should dial +1 480 629
1990.
This summary should be read in conjunction with the full text of
the following announcement and the Appendices. The Scheme will be
subject to the Conditions and further terms set out in Appendix I
to this announcement and to the full terms and Conditions to be set
out in the Scheme Document. Appendix II to this announcement
contains bases and sources relating to certain information
contained in this announcement. Appendix III provides information
in relation to certain irrevocable undertakings. Appendix IV
contains definitions of certain terms used in this announcement.
Enquiries:
Carlsberg
Jens Peter Skaarup (Danish Media) Tel: +45 3327
Mikael Bo Larsen 1417
Tel: +45 3327
1223
Heineken
Veronique Schyns (Dutch Media) Tel: +31 620 300
Jan van de Merbel 139
Tel: +31 651 400
621
Lehman Brothers (financial adviser and
corporate broker to BidCo and Carlsberg)
Adrian Fisk
Henry Phillips Tel: +44 20 7102
Ed Matthews (Corporate Broking) 1000
Credit Suisse (financial adviser and
corporate broker to BidCo and
Heineken)Bertrand Facon
Stuart Upcraft Tel: +44 20 7888
James Leigh Pemberton (Corporate Broking) 8888
Finsbury (public relations advisers to the Tel: +44 20 7251
Consortium) 3801
Mike Smith
Guy Lamming
Scottish & Newcastle
Richard Gibb: Head of Corporate Affairs Tel: +44 131 203
Robert Ballantyne: Head of Corporate 2000
Communications
Joanna Speed: Head of Investor Relations
Deutsche Bank (financial adviser and Tel: +44 20 7545
corporate broker to S&N) 8000
Nigel Meek
Jeremy Quin
James Arculus
James Agnew (Corporate Broking)
Rothschild (financial adviser to S&N) Tel: +44 20 7280
Akeel Sachak 5000
Nicholas Wrigley
Robert Plowman
UBS (financial adviser and corporate broker Tel: +44 20 7567
to S&N) 8000
Heino Teschmacher
James Robertson
Tim Waddell (Corporate Broking)
Smithfield (financial public relations Tel: +44 20 7903
adviser to S&N) 0667
John Kiely
This announcement is not intended to and does not constitute an
offer to sell 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
pursuant to the Offer or otherwise, nor shall there by any sale,
issuance or transfer of the securities in any jurisdiction in
contravention of applicable law. Any response in relation to the
Offer should be made only on the basis of the information in the
Scheme Document or any document by which the Offer is made. S&N
will prepare the Scheme Document to be distributed to S&N
Shareholders. S&N and BidCo urge S&N Shareholders to read the
Scheme Document when it becomes available because it will contain
important information relating to the Offer. S&N Shareholders may
obtain a free copy of the Scheme Document, when it becomes
available, from any of Deutsche Bank, Rothschild, UBS, Credit
Suisse or Lehman Brothers.
Whether or not certain S&N Shares are voted at the Court Meeting or
the EGM, if the Scheme becomes effective those S&N Shares will be
cancelled pursuant to the Scheme in return for the payment of 800
pence per S&N Share.
Credit Suisse, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively
for Heineken and BidCo and no-one else in connection with the Offer
and will not be responsible to anyone other than Heineken or BidCo
for providing the protections afforded to clients of Credit Suisse
or for providing advice in relation to the Offer or to the matters
referred to herein.
Lehman Brothers, which is authorised and regulated in the UK by the
Financial Services Authority, is acting exclusively for Carlsberg
and BidCo and no-one else in connection with the Offer and will not
be responsible to anyone other than Carlsberg or BidCo for
providing the protections afforded to clients of Lehman Brothers or
for providing advice in relation to the Offer or to the matters
referred to herein.
Deutsche Bank AG is authorised under German Banking Law (competent
authority: BaFin - Federal Financial Supervising Authority) and
with respect to UK commodity derivatives business by the Financial
Services Authority; and is regulated by the Financial Services
Authority for the conduct of UK business. Deutsche Bank AG is
acting exclusively for S&N and no-one else in connection with the
Offer and will not be responsible to anyone other than S&N for
providing the protections afforded to clients of Deutsche Bank AG
or for providing advice in relation to the Offer or to the matters
referred to herein.
N M Rothschild & Sons Limited, which is authorised and regulated by
the Financial Services Authority in the United Kingdom, is acting
for S&N and no one else in connection with the Offer and will not
be responsible to anyone other than S&N for providing the
protections afforded to clients of N M Rothschild & Sons Limited or
for providing advice in relation to the Offer or to the matters
referred to herein.
UBS Investment Bank, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting
exclusively for S&N and no-one else in connection with the Offer
and will not be responsible to anyone other than S&N for providing
the protections afforded to clients of UBS Investment Bank or for
providing advice in relation to the Offer or to the matters
referred to herein.
The availability of the Offer to S&N Shareholders who are not
resident in and citizens of the United Kingdom may be affected by
the laws of the relevant jurisdictions in which they are located or
of which they are citizens. Persons who are not resident in the
United Kingdom should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdictions.
Further details in relation to overseas shareholders will be
contained in the Scheme Document.
The release, publication or distribution of this announcement in
jurisdictions other than in the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about, and observe, any applicable requirements. Any failure to
comply with the applicable restrictions may constitute a violation
of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies involved in the
proposed Offer disclaim any responsibility or liability for the
violation of such restrictions by any person. This announcement
has been prepared for the purposes of complying with English law,
the Listing Rules, the rules of the London Stock Exchange and the
City Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been
prepared in accordance with the laws of any jurisdiction outside
the United Kingdom.
The Offer will not be made, directly or indirectly, in, into or
from any jurisdiction where to do so would violate the laws in that
jurisdiction. Accordingly, copies of this announcement and formal
documentation relating to the Offer will not be and must not be,
mailed or otherwise forwarded, distributed or sent in, into or from
any jurisdiction where to do so would violate the laws in that
jurisdiction.
Notice to US investors
The Offer relates to the shares in a Scottish company and is being
made by means of a scheme of arrangement provided for under company
law of Scotland. A transaction effected by means of a scheme of
arrangement is not subject to the proxy and tender offer rules
under the US Exchange Act. Accordingly, the Offer is subject to the
disclosure requirements, rules and practices applicable in the UK
to schemes of arrangement which differ from the disclosure
requirements of the US proxy and tender offer rules. Financial
information included in the relevant documentation will have been
prepared in accordance with accounting standards applicable in the
UK that may not be comparable to the financial statements of US
companies. If BidCo decides, subject to the consent of the Panel,
to implement the Offer by way of a takeover offer, the Offer will
be made in compliance with applicable US laws and regulations.
S&N is organised under the laws of Scotland. All of the directors
of S&N are residents of countries other than the United States, and
substantially all of the assets of S&N are located outside of the
United States. BidCo is a newly incorporated Jersey company owned
by Carlsberg, a Danish corporation and Heineken, a Dutch
corporation, and formed in connection with the Offer. You may not
be able to sue S&N, BidCo, Heineken or Carlsberg in a non-US court
for violations of US securities laws.
Neither the SEC nor any securities commission of any state of the
United States has (a) approved or disapproved of the Offer; (b)
passed upon the merits or fairness of the Offer; or (c) passed upon
the adequacy or accuracy of the disclosure in this document. Any
representation to the contrary is a criminal offence in the United
States.
Forward-Looking Statements
This announcement, oral statements made regarding the Offer, and
other information published by Heineken, Carlsberg, BidCo and S&N
contain statements that are or may be "forward-looking statements",
including for the purposes of the US Private Securities Litigation
Reform Act of 1995. These statements are based on the current
expectations of the management of Heineken, Carlsberg, BidCo and
S&N and are naturally subject to uncertainty and changes in
circumstances. The forward-looking statements contained herein
include statements about the expected effects of the Offer on S&N
and BidCo, the expected timing and scope of the Offer, synergies,
other strategic options and all other statements in this
announcement other than historical facts. Statements in this
announcement relating to BBH are or may be "forward-looking
statements", including for the purposes of the US Private
Securities Litigation Reform Act of 1995. These statements are
based on the current expectations of the management of Carlsberg
and S&N and are naturally subject to uncertainty and changes in
circumstances. Forward-looking statements include, without
limitation, statements typically containing words such as
"targets", "plans", "aims", "intends", "expects", "anticipates",
"believes", "estimates", "will", "may" and "should" and words of
similar import. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. These forward-looking
statements are not guarantees of future performance and have not
been reviewed by the auditors of BidCo or S&N. There are a number
of factors that could cause actual results and developments to
differ materially from those expressed or implied by such
forward-looking statements. These factors include, but are not
limited to, the satisfaction of the Conditions to the Offer, as
well as additional factors, such as changes in economic conditions,
changes in the level of capital investment, success of business and
operating initiatives and restructuring objectives, customers'
strategies and stability, changes in the regulatory environment,
fluctuations in interest and exchange rates, the outcome of
litigation, government actions and natural phenomena such as
floods, earthquakes and hurricanes. Other unknown or unpredictable
factors could cause actual results to differ materially from those
in the forward-looking statements. Investors should not place undue
reliance on any forward-looking statements and neither Heineken,
Carlsberg, BidCo, nor S&N undertakes any obligation to update
publicly or revise forward-looking statements, whether as a result
of new information, future events or otherwise, except to the
extent legally required.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the City Code, if any person
is, or becomes, "interested" (directly or indirectly) in 1 per
cent. or more of any class of "relevant securities" of S&N, all
"dealings" in any "relevant securities" of S&N (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 p.m. (London time) on the Business Day following the date of
the relevant transaction. This requirement will continue until the
date on which the Offer becomes effective, 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, 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 City Code, all "dealings"
in "relevant securities" of S&N by Heineken, Carlsberg, BidCo or
S&N, or by any of their respective "associates", must be disclosed
by no later than 12.00 noon (London time) on the 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 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 City Code, which can
also be found on the Panel's website. If you are in any doubt as to
the application of Rule 8 to you, please contact an independent
financial adviser authorised under the Financial Services and
Markets Act 2000, or consult the Panel's website at
www.thetakeoverpanel.org.uk.
