Carlsberg and Heineken raised their bid for Scottish & Newcastle for a third time, to force Britain's biggest brewer into talks on a 7.8 billion pound ($15.3 billion) takeover.
The Danish-Dutch bidding consortium increased its joint bid to 800 pence a share in cash on Thursday from 780p, and the whole of the extra cost will be funded by Denmark's Carlsberg in a move that will split up the British brewer of Foster's and Kronenbourg.
The latest offer is at a 26 percent premium to S&N's closing share price on Oct. 16, the day before Carlsberg and Heineken first announced their approach.
Britain's Takeover Panel meanwhile agreed to extend its deadline for a firm offer by three days to midday London time on Jan. 24 to enable Carlsberg and Heineken to
complete its due diligence.
Scottish & Newcastle shares ended 5.4 percent higher, while Carlsberg shares were 2.7 percent lower as it will pay all the extra cost and Heineken gained 1.6 percent.
"Carlsberg probably didn't want the deal to die. They had to do it to get into a dialogue with S&N. I don't think that they will go over 800, it's not
cost-effective," said Michael Lyngsoe, an analyst at Jyske Bank.
Cazenove analyst Matthew Webb said that there was an extremely high chance of a deal at the 800p level.
"Scottish & Newcastle Plc and Carlsberg A/S and Heineken NV confirm that they have entered into discussions in relation to a possible recommended offer
for S&N at 800 pence per share," S&N said.
The bidders approached S&N in October with an offer of 720p, but raised that to 750p the following month and then again to 780p last week, but S&N rejected
them all and said it would only enter talks if the bid was raised to 800p.
Sources close to the deal said the price of a recommendation from the S&N board was a bid of 800p and full financial details for Baltic Beverages Holding
(BBH) the joint venture S&N runs with Carlsberg in Russia and other former Soviet Union nations.
S&N's main defence through the three-month long bid saga has been to seek an accurate valuation of BBH for its shareholders as it is the group's key asset
with most of BBH earnings coming from the fast-growing and very profitable Russian beer market.
"I think we can count on reaching the finish line. They seem to be very close to each other and the overall market has dropped considerably, which makes
the bid that more interesting," said Handelsbanken analyst Kitty Gron.
A 800p cash bid will gave a total value to S&N including debt and pension liabilities of around 10.2 billion pounds.