In the good ol’ days, when beer was beer and British pubs shut too soon, a 10 per cent move in a stock price meant one thing: a statement, issued at the behest of the The Panel on Takeovers & Mergers.
It would be begin, generically enough, “Following the recent rise in XYZ’s share prices, the board can confirm that…” And then it would say what was going on.
It would inform the market. It would state whether the persistent market chatter than XYZ was about to merge with ABC was actually true. The market would either be put right or proved to have been well informed.
Not any more.
Shares in Scottish & Newcastle spiked 12.6 per cent during late afternoon trade on Thursday. The story? Well, according to the mainstream financial news wires this FTSE 100 brewer might be on the receiving end of a bid from its Dutch rival, Heineken. Cue “no comment” from all concerned.
For what it’s worth, usually knowledgeable sources say S&N is indeed in the frame. They say a formal announcement was being prepared for early next week — before Thursday’s share price move disrupted plans.
But Heineken is not their preferred speculation. Such an alliance would face immediate regulatory problems, not least in France where S&N has 34 per cent of the beer market and Heineken 29 per cent. And in any case brewers, like Heineken, looking for growth know they would do better looking at opportunities in emerging markets, like Russia and China.
Which brings us to Carlsberg.
Carlsberg has a 50/50 joint venture with S&N in BBH, which now ranks as Russia’s leading brewer. If Heineken were to bid for S&N, a call option would be triggered allowing Carlsberg to snap up the 50 per cent of BBH it does not already own.
So here, perhaps, is what speculators should be focusing on: the chances are S&N has been approached by a consortium comprising Carlsberg and a major private equity house. Together they will have a plan to develop the company — in two parts.
A bid, FT Alphaville understands, is imminent.
Or it might just be the drink talking…