Bid hopes fade as S&N names chief executive

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The Independent Online

Investors in Scottish & Newcastle hoping for a lucrative takeover by the Danish brewing giant Carlsberg may be disappointed, analysts warned yesterday, after the appointment of a new chief executive at Britain's biggest brewer.

S&N said John Dunsmore, its managing director in western Europe, would replace Tony Froggatt, the current chief executive, at the beginning of November. Mr Froggatt, who was appointed in 2003 after a series of problems at S&N, is stepping down slightly ahead of schedule, having planned a five-year term of office.

Matthew Webb, a brewing analyst at Cazenove, said a newly appointed chief executive would be more reluctant to countenance takeover offers from suitors such as Carlsberg. "We presume Mr Dunsmore would be reluctant to accept an offer having only just been appointed," he said. "This would make it harder for Carlsberg to get a recommendation than would have been the case with Mr Froggatt in charge."

A Carlsberg bid for S&N has been rumoured since ownership reforms at the Danish group this year. After the reorganisation, Carlsberg said it had more than £6bn to spend on acquisitions.

Mr Dunsmore was promoted to managing director, Europe, in May and was the favourite to succeed Mr Froggatt. His early accession surprised analysts who believed Carlsberg would have longer to pursue takeover talks with the current management.