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Rumours are widespread about one of Scottish & Newcastle's rivalsmaking a bid for the brewery, yet all the large international playersare reportedly shying away. What is it about Scottish & Newcastlethat's apparently turning off other breweries? Sonoo Singh reports
A week rarely goes by without Scottish & Newcastle (S&N) emerging as atakeover target for one of its rivals and speculation is once againdriving up the share price of Britain's biggest brewer.
But any deal still seems to be a long way off, with most rival brewersadmitting only a lukewarm interest in the company. SABMiller,Carlsberg, Diageo and Heineken have all reportedly distanced themselvesfrom the idea of making a formal bid.
Analysts say the bid speculation is symptomatic of the current market,which is rife with rumours about several unrelated blue-chip stocks,including Sainsbury's, Boots and Imperial Tobacco.
They remain doubtful about a bid for S&N, although the brewer of JohnSmith's bitter and Newcastle Brown Ale has a healthy business inWestern Europe. It recently reported a 13.9% rise in pre-tax profits topound 452m last year, and a 7% increase in turnover to pound 4.15bn. The companyalso claimed to have increased its share of the UK beer market to26.5%, up from 25.3%, winning drinkers in a declining market with thelaunch of new lines such as Foster's Twist.
But it is S&N's position in Western markets that is putting offinterested parties, say analysts. "The lack of any serious bid isbecause of the unattractive nature of the mature Western Europe brewingmarket," believes Sam Hart, an analyst at Charles Stanley.
Dresdner Kleinwort analyst Andrew Holland adds: "Two-thirds of...