The Carlsberg and Heineken consortium is under increased pressure to raise its bid for Scottish & Newcastle ahead of a Takeover Panel deadline and after S&N's chief executive opened the possibility of talks if the pair significantly raised their takeover bid, analysts insist.
S&N chief executive John Dunsmore said in a Christmas letter to staff that he was "not interested in pursuing a course of action that defends S&N's independence at all costs so if the consortium comes up with a thumping great offer then we may have to talk".
In response, Heineken spokeswoman Veronique Schijns reiterated a consortium statement that its current 750 pence per S&N share indicative offer is "full and fair" and that it wants to enter into talks with S&N about its current proposal.
S&N owns Hereford cider maker Bulmers.
Theodoor Gilissen analyst Jan Meijer said Mr Dunsmore's statement signified a switch in tone from S&N following repeated refusals to enter into talks with the consortium and the start of legal wrangling around the East European joint venture BBH that S&N shares on a 50-50 basis with Carlsberg.
"It seemed to be a little bit of a change in the tone of voice and indicates that there might be various options," he noted. "It seems there is nothing sacred about keeping the company independent. That's a bit of a change.
"It is all about the price. When Dunsmore is going to sell his company, he is going for the best price. So this is now really about how far the consortium will go. Is it 800 pence or higher even?"
However, a UK analyst said Mr Dunsmore's statement was "blindly obvious" and added that "we can only speculate about what price he wants".
The analyst stressed further that he believes it is unlikely that S&N will enter talks at the current level and that the next move has to come from the consortium.
"I think there needs to be a higher offer," the analyst said, adding that a revised figure of 770 pence is possible.
An S&N spokesman said Mr Dunsmore's comments were "very general" and signified that like any company, S&N would open talks with other parties if it is presented with proposals that it considers to be good value to the business.
But he stressed that the brewer was not prepared to enter talks with the consortium at the 750 pence level.
Earlier this month, the Takeover Panel imposed a January 21 "put up or shut up" deadline on the consortium to either announce a formal bid or to walk away for six months.
Ms Schijns, however, refused to speculate about what the consortium might do ahead of the deadline.
The consortium wants S&N shareholders to pressure the brewer's board into entering talks.
Sources close to the consortium said earlier this month that it is regular contact with S&N shareholders.
But as the deadline looms, an Amsterdam analyst said the involved parties need to do something to break the deadlock, adding that the greatest pressure is on Carlsberg due to the Swedish arbitration case over BBH.
"Carlsberg simply cannot lose. It is taking a huge gamble. Suppose that the Swedish court rules in June that S&N can buy out its stake in BBH. That would be disastrous for Carlsberg," he said.
The analyst said Carlsberg and Heineken might launch a hostile bid for S&N, but added that a more likely scenario is a higher bid and perhaps a revised contribution ratio between the consortium members.
Currently, the contributions by Carlsberg and Heineken to the consortium bid is 54 per cent and 46 per cent respectively.
The analyst said consensus opinion is that Carlsberg is not paying a full price for S&N's operations, while Heineken is for what amounts to "no growth" Western European assets.
And as the pressure starts to shift from S&N to the consortium, the analyst stressed that Heineken and Carlsberg "are now in a hurry and need to come up with an offer".
"It seemed to be a little bit of a change in the tone of voice and indicates that there might be various options ..SUPL: