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Categories: Mergers and Acquisitions

Carlsberg Discounts $6.3 Billion S&N Rights by 40 pct

Source: Reuters
16/05/2008

Copenhagen, May 16 - Danish brewer Carlsberg announced a deeply discounted 30.5 billion crown ($6.3 billion) rights issue to repay a bridging loan used to buy UK-based rival Scottish & Newcastle, in line with January's plans for the deal.

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The Copenhagen-based brewer said its one-for-one offer at 400 crowns each, doubling the number of shares in issue, was at a 40 percent discount to a closing price of 666 crowns on Wednesday. The stock closed on Thursday at 674 crowns.

"It's positive that Carlsberg will get that money, but in my view they're giving a fairly big discount on the new shares at 40 percent," said Stig Nymann, an analyst at Gudme Raaschou.

Carlsberg said the move was intended to secure its investment grade credit rating and financial flexibility.

"Of course it's a very big issue, doubling their number of shares, so I suppose it had to be a large discount," said Nymann. "The share price will drop at the open but it's hard to really say by how much."

The rights issue is fully underwritten by BNP Paribas, Danske Bank, Lehman Brothers, and Nordea Bank.

Carlsberg and Dutch rival Heineken agreed this year to buy Scottish & Newcastle for 7.8 billion pounds ($15.3 billion) carving up Britain's biggest brewer.



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