Carlsberg is planning a DKK30bn ($5.8bn) rights issue to finance its proposed £7.1bn takeover of Scottish & Newcastle.
The Danish brewer, which has teamed up with Heineken to try to acquire the UK’s biggest brewer, has lined up Danske Bank and Nordea, alongside its adviser Lehman Brothers, to help finance the deal.
The banking syndicate will initially underwrite an equity bridge facility and launch a rights issue at a later date – allowing Carlsberg to keep an investment grade rating.
Carlsberg and Heineken infuriated S&N last week after they were forced to admit they were plotting a break up of S&N.
The pair are understood to be looking at an offer pitched at between 720p and 750p a share, valuing S&N at up to £7.1bn.
However, S&N, which runs the highly profitable Baltic Beverages Holdings with Carlsberg, said the potential offer was “unwelcome”.
It has worked closely with Carlsberg since 2002, when it acquired a stake in BBH after acquiring Hartwall, the Finnish brewer.
The two companies have held talks about a possible merger in the past.
“Whatever happens going forward, the status quo with Carlsberg cannot remain,” one person close to the UK brewer said.
S&N is already threatening to sell its stake in BBH, which analysts value at about £4.1bn, to a rival group such as SABMiller.
It is also hoping Carlsberg and Heineken will encounter a problem with the Chinese and Indian assets, which are an important part of the pair’s growth strategy.
Vijay Mallya, the Indian owner of United Breweries in which S&N has a 37.5 per cent stake, could refuse to deal with a prospective buyer of United Breweries or sell out his 37.5 per cent holding in the company.
In China, S&N has a 17.5 per cent stake in Chong Qing Breweries, in partnership with the local government.
Legal constraints surrounding both regions mean Carlsberg and Heineken would need access to S&N’s books, and the pair have not ruled out eventually going hostile. They are expected to try to meet S&N in the next few days before tabling a formal bid in the next 10 days.
If a formal offer is made, Carlsberg would take BBH, the French and Greek operations and China. Heineken would take the UK and other European businesses of S&N including Finland and Portugal, and India. The proposed deal has been structured to avoid antitrust issues for Carlsberg in the UK and western Europe.