08 Jan 2008

Value to S&N of winning the BBH arbitration

Detailed claim submitted to Arbitral Tribunal
S&N sees significant value from controlling BBH, including synergies of £100 million per year

Summary

Arbitration

• Detailed claim now submitted to Arbitral Tribunal in Stockholm arising from breaches of the BBH Shareholders' Agreement
• Carlsberg has misused confidential information, has breached its duty of loyalty and other express provisions in the Agreement, has circumvented the "shotgun" and its actions will damage the joint venture
• S&N is confident that its claim will be successful and that it will have the right to acquire Carlsberg's 50% in BBH at fair market value
• Decision due by 3 July 2008

BBH synergies

• Synergies of £100 million per year available to S&N from controlling BBH
• Comprise both cost and revenue synergies
• Capturing synergies would involve little disruption to the businesses and at limited cost
• Ernst & Young and each of S&N's financial advisers have reported on the statement of merger benefits in accordance with the provisions of the Takeover Code

Value of controlling BBH

• S&N sees significant additional value for its shareholders from controlling BBH against the value implied in the proposed consortium offer
• With increased exposure to growth markets S&N would become a business with one of the most attractive sales, earnings and margin profiles in global beverages
• The enlarged group would have an attractive opportunity to participate in further industry consolidation

John Dunsmore, the S&N Chief Executive, said:

"While the consortium continues to seek to acquire S&N's unique portfolio of assets on the cheap, we are continuing to explore fully every option to deliver shareholder value.  Carlsberg's desire to terminate the BBH joint venture by circumventing the BBH shareholders' agreement provides a huge opportunity for us to take control of BBH through a successful arbitration process.

We have studied the implications closely with our advisers and believe that this would be in the best interests of our shareholders. Controlling BBH would make S&N one of the most attractive international beverage businesses."

This summary should be read in conjunction with the full text of the following announcement. A presentation summarising the key points of this announcement is now available on the Scottish & Newcastle website ( http://www.scottish-newcastle.com/sn_acq/ir/pres/).

For information, please contact:

Download the full version of the S&N of winning the BBH arbitration.

To view PDFs you need the Adobe Acrobat Reader. This program is available free of charge from the Adobe website.

Back to Top