10 Jan 2008

Scottish & Newcastle rejects 780 pence per share proposal from Carlsberg and Heineken

Scottish & Newcastle plc ('S&N' or the 'Company') yesterday received a revised proposal from Carlsberg A/S ('Carlsberg') and Heineken N.V. ('Heineken') (collectively the 'Consortium'), to make an offer for S&N at 780 pence per share. This proposal was still subject to similar levels of conditionality as previous proposals received from the Consortium.

The Board of S&N has met and considered this proposal carefully. The Board concluded, having consulted its advisers, that it still failed to reflect the unique strengths and market positions of the Company and again failed to be competitive with the alternatives the Company can pursue for delivering value to its shareholders.

On 8 January, S&N set out its Arbitration case and the significant benefits for its shareholders from taking control of BBH including £100m of synergies per annum and a potential re-rating. In addition, the depreciation of sterling against the Euro, Russian rouble and US dollar since the Consortium's previous proposal to acquire S&N, submitted on 15 November 2007, has the effect of boosting the value of S&N's international business in Sterling terms. As a result, S&N believes that a significant part of the increase in the Consortium's proposal simply reflects this appreciation.

The Board has discussed with the Consortium that it is prepared to engage with them, but only when a firm proposal of at least 800 pence per share had been made and when Carlsberg has agreed to the publication of proper information about BBH prospects.

For information, please contact:

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.

FIH Partners is advising S&N in regard to BBH. UBS, Deutsche Bank and Rothschild are advising the Company on all financial matters.

Under the provisions of Rule 8.3 of the Takeover Code (the 'Code'), if any person is, or becomes, 'interested' (directly or indirectly) in 1% or more of any class of 'relevant securities' of Scottish & Newcastle plc, all 'dealings' in any 'relevant securities' of that company (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 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, 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 Scottish & Newcastle plc, 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 Code, all 'dealings' in 'relevant securities' of Scottish & Newcastle plc by Carlsberg A/S or Heineken N.V. or Scottish & Newcastle plc, or by any of their respective 'associates', must be disclosed by no later than 12.00 noon (London time) on the London 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 Takeover 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 Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel.

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