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Announcement of recommended cash offer for Scottish and Newcastle pic
On 25 January 2008, the boards of Sunrise Acquisitions Limited (the company jointly owned by Heineken
N.V. and Carlsberg A/S) and Scottish and Newcastle pic ('S&N') announced that they have reached an
agreement on the terms of a recommended cash offer ('the Offer') for the entire issued and to be issued
share capital of S&N. Under the terms of the offer, S&N shareholders will receive 800 pence in cash for
each share.
The offer is subject to the approval of Heineken N.V. and Heineken Holding N.V. ('Heineken Holding')
shareholders. S&N has received irrevocable undertakings from the controlling family shareholders in
respect of all of their own beneficial holdings of Heineken shares and Heineken Holding shares to vote
in favour of (or procure the voting in favour of) any such resolutions that may be necessary to approve,
effect and implement the Offer by Sunrise Acquisitions Limited to be proposed at the Heineken
Shareholders Meeting and the Heineken Holding Shareholders Meeting.
The approval of the European Commission and certain other competition authorities will also be
required. Subject to the satisfaction of the Conditions, it is expected that the Scheme will become
effective during the first half of 2008.
In anticipation of the contemplated acquisition of S&N, banks committed to a new multicurrency
acquisition facility for an amount of £3.85 billion for Heineken's part of the financing of the offer,
for any re-financing of existing debt of the companies to be acquired by Heineken as well as for related
transaction costs. The facility consists of a £1.1 billion tranche with a maturity of one year (extendable
to two years), and a £2.75 billion five year tranche. Interest is based on EURIBOR/LIBOR plus a margin.
No financial covenants apply; there is only an incurrence covenant.
The combination of this new credit facility, and the €2 billion existing facility, largely exceeds the
estimated enterprise value (including assumed debt) of the S&N's businesses to be acquired by Heineken
of £4.5 billion (€6.1 billion).
If the Offer is accepted by the Scheme Shareholders, Heineken will gain control over S&N's businesses
in the United Kingdom and Ireland, Portugal, Finland, Belgium, United States and India. Following
completion of the offer, S&N's share of BBH Russian Breweries, as well as the French, Greek, Chinese and
Vietnamese operations are transferred to Carlsberg A/S. The remaining businesses, principally the UK
and Ireland, Portuguese, Finnish, Belgian, US and Indian operations, will be seperated as soon as possible
and in any event within 12 months after the Effective Date.
Heineken N.V. Annual Report 2007
