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Last Updated: Friday, 30 March 2007, 17:39 GMT 18:39 UK
Bid rumours surround brewer S&N
Bottles of S&N's Newcastle Brown Ale
S&N is the largest UK-owned brewer
Shares in the UK's biggest brewer Scottish & Newcastle (S&N) have risen strongly on speculation it may be a takeover target for rival Heineken.

Shares in S&N, whose brands include Fosters and Kronenbourg, closed more than 1% higher on Friday after closing 12% ahead on Thursday.

Despite the rumours, analysts were divided on whether any bid for S&N from the Dutch company would be forthcoming.

Both firms have declined to comment on the takeover speculation.

Anti-competition issues

Some brewing industry analysts said Edinburgh-based S&N was vulnerable to takeover as it did not have a big controlling shareholder.

Heineken beer bottles

But others said Heineken might be put off by the possibility that, if they make a bid, such a deal may come under close examination by competition regulators, especially in France where both companies dominate.

Other commentators speculated whether Danish brewer Carlsberg would be a better fit for S&N, and that the two could potentially look to merge in the future.

Some of S&N's other well known brands include Newcastle Brown Ale, John Smith's, and cider Strongbow.

Last month it said it was looking to make 50m of cost savings over the next three years. The announcement came as it announced that its 2006 pre-tax profits were up 14% to 452m.

Shares in the group ended 6.5 pence higher at 601.5p in Friday trade on the London market.

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