« Financial Alchemy Continues as Blackstone Uses Stock to Fund…Hedge Fund Purchase for More Credit Deals | Main | Kraft Spinoff CanGro Continues to Shrink Jobs Through Closures, Outsourcing »

PE Firms Step into Brewery Wars

The UK-based brewers Scottish & Newcastle (S&N) have turned to private equity firms Blackstone and TPG in their efforts to wring the maximum out of their 50% stake in Baltic Beverages Holdings (BBH).

BBH, with 19 breweries in the Baltic countries, Kazakhstan, Russia and the Ukraine is a 505/50 joint venture between S&N and Carlsberg. Faced with a hostile Carlsberg/Heineken consortium demanding it sell its stake, S&N is seeking a higher price or a buyout of its partner with private equity participation. The sticking point for institutional investors in S&N is that financial information on BBH can only be released through joint agreement between the partners, and that has never happened. In pursuit of its takeover, Carlsberg has agreed to release some information to shareholders, but S&N says it doesn't go far enough.

It has taken a bidding war and the potential involvement of private equity investors to generate a simple 2008 profit forecast for BBH. Which is more than the company's 14,500 workers have ever been able to get out of the co-owners, who have persistently failed to make available to unions in the company information on such fundamentals as capital investment or profits.