The bidding for Bass's breweries, which were originally expected to fetch only £1.6bn, has been pushed beyond £2bn by a dog-fight between Carlsberg and South African Breweries.
The two bidders are understood to have emerged as the front-runners to buy Britain's second-biggest brewer, whose beers include Carling. The other contender is Heineken, the Dutch operator which is Europe's biggest brewer.
The progress of the auction will have delighted Sir Ian Prosser, chief executive of Bass. He has capitalised on the eagerness of both Carlsberg, the privately owned Danish brewer, and South African Breweries, which recently floated on the London Stock Exchange, to acquire Bass's 24 per cent share of the UK market. It is second only to Scottish & Newcastle, which recently acquired French group Danone's brewing arm, Kronenbourg, and controls 28 per cent of the British market.
Bass is expected to clarify details of the sale, which is being handled by the investment bank Schroders, when it reveals its interim results at the end of the month. A Bass spokesman declined to comment on the progress of the auction.
The battle for control of Bass's breweries is the latest stage in the reinvention of some of the most famous names in Britain's drinks industry. Bass's exit from the business which made it famous, in favour of concentrating on its hotel, pub and restaurant interests, is expected to be followed by that of Whitbread. Although Whitbread chief executive David Thomas declined to commit himself to a disposal at last week's results presentation, a sale later this year is widely expected. There is speculation that Whitbread will use the funds generated to acquire Greenalls, the hotel group, or a chain of fitness clubs to sit alongside its David Lloyd Leisure business.
Scottish & Newcastle, however, has taken the opposite approach by strengthening its brewing interests in March with the Kronenbourg purchase, a deal which created Europe's second largest operator. S&N is in the process of disposing of its Center Parcs chain of holiday villages, as well as its Pontins holiday camps. There is speculation that its next step will be the sale of its pub division to fund another brewing acquisition, possibly Guinness, which is now part of Diageo. But regulatory conditions preclude S&N from acquiring Bass's breweries.
Bass, Whitbread and S&N are all under pressure to dispose of their non-core interests to conform with the stock market's liking for focused businesses. Whitbread and S&N recently saw their shares ejected from the FT-SE 100 after months of under-performance.Reuse content