Carlsberg discounts S&N rights by 40 percent

Fri May 16, 2008 9:06am BST
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By Gelu Sulugiuc

COPENHAGEN (Reuters) - Danish brewer Carlsberg announced a deeply discounted 30.5 billion crown (3.3 billion pound) rights issue to repay a bridging loan used to buy UK rival Scottish & Newcastle, in line with January's plans for the deal.

The company's chief executive said the rights issue would allow Carlsberg to keep its investment grade credit rating and give it flexibility for possible acquisitions in Asia.

The Copenhagen-based brewer said its one-for-one offer at 400 crowns each, doubling the number of shares at issue, was at a 40 percent discount to a closing price of 666 crowns on Wednesday. The stock closed on Thursday at 674 crowns.

By 0752 GMT, Carlsberg shares were down 3.7 percent at 649 crowns, while Copenhagen's top 20 index was up 0.1 percent.

"It's positive that Carlsberg will get that money, but in my view they're giving a fairly big discount on the new shares at 40 percent," said Stig Nymann, an analyst at Gudme Raaschou.

"Of course it's a very big issue, doubling their number of shares, so I suppose it had to be a large discount," he added.

Carlsberg Chief Executive Jorgen Rasmussen said the rights issue was well received by existing and new shareholders.

"Everyone believes in our strategy, so we don't expect any big problems," he said in a teleconference.  Continued...