SABMiller, the FTSE 100 brewer, is taking advice from Morgan Stanley and Dresdner Kleinwort as it considers whether to become involved in the Scottish & Newcastle (S&N) bid battle, The Times has learnt.

S&N, which owns the John Smith’s and Kronenbourg 1664 brands, has been tipped as a possible target for the likes of SABMiller and Anheuser-Busch after rebuffing a joint approach worth almost £9 billion from Carlsberg of Denmark and Heineken, the Dutch brewer.

It is understood that although SABMiller has made no firm decisions, it is considering options ranging from making an outright bid for S&N to attempting to acquire its interests in India and China or its 50 per cent stake in Baltic Beverages Holding (BBH).

A source close to the situation insisted that neither Morgan Stanley nor Dresdner Kleinwort had been formally hired by SABMiller. “It’s not a question of how it should get involved but whether it should get involved. No decision has been taken.”

The possible involvement of SABMiller comes amid continuing acrimony between S&N and Carlsberg, its joint venture partner in BBH. S&N claims that the Danish group’s actions have breached their BBH agreement and has launched an arbitration claim to buy Carlsberg’s 50 per cent.

The jewel in BBH’s crown is its 85 per cent stake in Russia’s Baltika Breweries, which yesterday reported a 22 per cent jump in beer volumes in the first nine months of the year.

John Dunsmore, the new chief executive of S&N, said: “The Baltika figures reinforce everything we are saying about BBH.

“It is truly an exciting business and will be one of the future dynamos in global beer.”

Mr Dunsmore reiterated that he had no intention of engaging in dialogue with Carlsberg over its mooted 720p-a-share offer. “There is absolutely nothing to talk about. We have rejected their proposal. It is misleading to continue to repeat that the ball is in our court.”

He said that he would use S&N’s planned trading update on November 20 to give a detailed analysis of the group’s future strategy. Analysts believe he will use the occasion as an opportunity to outline S&N’s bid defence in the event that its suitors lodge a formal offer.

Mr Dunsmore yesterday garnered support from Giles Thorley, chief executive of Punch Taverns, who dismissed Carlsberg’s and Heineken’s chances of success at the current level of 720p. “Unless something drastic happens their chances are slim to nil,” he said.

Mr Thorley, who was expressing a personal view, said he was concerned that if S&N were to become merely a local offshoot of a large international brewer its commitment to the UK market could be diluted.

Shares of S&N fell by 5p to 750p, as traders speculated that Carlsberg and Heineken might up the ante to about 750p in an effort to persuade Mr Dunsmore and his boardroom colleagues to agree to meet up.

Punch prospects

—Punch Taverns’ chief executive, Giles Thorley, has admitted that a sale of Spirit Group, its managed pub division, looks less likely because of the credit crunch.

—Although Punch has yet to decide on Spirit’s future, Mr Thorley conceded that the prospect of a sale had been reduced by difficulties that would-be buyers face in raising funds. He said: “We don’t need to sell financially and we wouldn’t maximise value if we did so today. It’s probably worth more to us than to anyone else, but that could change.”

—Mr Thorley said that Punch was in a strong position to take advantage of any acquisition opportunities that arose from the financial climate, although nothing was being looked at.

—Shares in Punch, which has more than 8,400 pubs, rose 25.5p to 928.5p as it reported a 13 per cent rise in profits, before tax and one-off items, to £282 million in the year to August 18, on revenues up 10 per cent at £1.7 billion.

—Like-for-like profits rose by 2.7 per cent in its leased sites. Its managed sites’ profits rose 1.4 per cent.

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