Scottish & Newcastle considers BBH sale

LONDON (Reuters) - Scottish & Newcastle may sell its stake in Russia-based brewer Baltic Beverages Holding (BBH) to block a potential joint bid from Carlsberg and Heineken, a source said.

The source close to the matter told Reuters on Sunday that Scottish & Newcastle is considering all options including selling its stake in BBH venture, which Carlsbeg wants to take a full control via its joint bid with Heineken.

Denmark's Carlsberg and Dutch Heineken announced their joint approach for the Edinburgh-based brewer last week, with Carlsberg intending to buy Scottish & Newcastle's interest in BBH.

BBH is seen as the jewel in the British brewer's crown as it controls over 85 percent of Baltika, the biggest brewer in the world's third largest beer market, Russia, and provides around one third of Scottish & Newcastle and Carlsberg's group earnings.

Heineken, the world's fourth largest brewer, would take over Scottish & Newcastle's British business which includes Strongbow cider and John Smith's beer and its other European units including Belgium, Finland and Portugal.

Scottish & Newcastle, which called the proposed break-up bid unsolicited and unwelcome, declined to comment.

The Sunday Telegraph said in an unsourced report that the brewer could bring in a strategic partner, with SABMiller and Anheuser-Busch believed to have made contact with Scottish & Newcastle to fend off the bid approach.

Other sources told Reuters last week that Carlsberg and Heineken were keen to promote a friendly approach and were pushing to get a firm proposal this week, which analysts say would be around 800 pence per share in cash and value the group at 7.6 billion pounds.

Scottish & Newcastle, the country's last big independent brewer and No. 6 in the world, has been seen as a takeover target for many years with the world's No. 5 Carlsberg seen as the most likely suitor due to its joint ownership with Scottish & Newcastle of the fast-growing BBH.