S&N Files Arbitration Claim Against Carlsberg
S&N says that the move arises from breaches of the BBH Shareholders' Agreement which it has with its partner now turned predator. Carlsberg is involved with Heineken in a hostile takeover bid for S&N.
08/01/08 Scottish & Newcastle has announced that it has submitted its detailed claim to the Arbitral Tribunal in Stockholm against Carlsberg's wholly-owned subsidiary Pripps-Ringnes. S&N says that the move arises from breaches of the BBH Shareholders' Agreement which it has with its partner now turned predator. Carlsberg is involved with Heineken in a hostile takeover bid for S&N.
S&N said that it has been advised that its claim is strong and is confident that it will be successful. This would result in S&N being able to acquire Carlsberg's 50% share in BBH at fair market value.
S&N said that the key elements of the Claim submitted today are as follows:
• Misuse of confidential information: Three year plans for each BBH business were agreed by Carlsberg, S&N and BBH management in local currency terms in October 2007. These plans clearly show the very strong growth prospects of BBH and highlight the significant undervaluation of BBH in the consortium proposal. This confidential information has been misused by Carlsberg:
- Carlsberg (through its subsidiary, Pripps-Ringnes) has used this confidential BBH information in ways beyond those permissible under the Agreement, and since being made aware of this misuse has taken no steps to stop it; and
- Carlsberg continues to use the confidentiality clause to prevent S&N shareholders from having a summary of agreed information about BBH's future prospects - even though Carlsberg itself has breached that same clause.
Breach of duty of loyalty and other express provisions of the Agreement: The Agreement contains various clauses normal for a very long term joint venture of this nature. It also includes a clear duty of loyalty under which both parties must work for the benefit of the BBH businesses and do nothing that may damage BBH.
John Dunsmore, the S&N Chief Executive, said: "While the consortium continues to seek to acquire S&N's unique portfolio of assets on the cheap, we are continuing to explore fully every option to deliver shareholder value. Carlsberg's desire to terminate the BBH joint venture by circumventing the BBH shareholders' agreement provides a huge opportunity for us to take control of BBH through a successful arbitration process.”
“We have studied the implications closely with our advisers and believe that this would be in the best interests of our shareholders. Controlling BBH would make S&N one of the most attractive international beverage businesses," he added.
