Scottish & Newcastle (S&N), Britain's biggest brewer, today rebuffed a possible takeover bid from Carlsberg and Heineken describing the proposed break-up as "unsolicited and unwelcome".

Its two European rivals had earlier confirmed that they were in talks about making a joint offer for S&N with a view to splitting its operations between them.

Shares in Scottish & Newcastle, which has long been tipped as a bid target, closed almost 19 per cent higher at 756p, valuing the company at £7.15 billion, or about £9 billion including debt, as its suitors said that discussions were taking place about forming a consortium to make a cash bid.

But in a swift riposte, S&N rebuffed the advances, insisting it was "confident in its future as an independent group with a combination of strong growth in emerging markets and cash generation in developed markets".

It added: "S&N strongly urges shareholders to take no action at this time."

Martin Slaney, head of spread betting at GFT Global Markets, said speculation pointed towards a 800p-a-share bid that would value Scottish & Newcastle at £7.5 billion.

Analysts opined that, including S&N's £1.9 billion of debt and a bid premium, Carlsberg and Heineken could face having to fork out as much as £10 billion for the British group.

However, a source close to the consortium pointed out that the "undisturbed shareprice" - before bid rumours first arose at the end of March - was about 530p. The source expressed surprise at the swiftness of S&N's rejection, given that it had yet to receive an approach.

Its two rivals put out a joint statement in response to a rise in S&N's shareprice. They confirmed that they were "in discussions regarding the formation of a consortium to make an offer for the entire issued share capital of Scottish & Newcastle".

Under the proposal, Heineken would acquire Scottish & Newcastle's UK business and certain other European operations, notably in Finland and Portugal, while Carlsberg would take its interests in France and Greece as well as its 50 per cent stake in Baltic Beverages Holding (BBH).

However, the putative suitors cautioned that they had yet to make an approach to the Edinburgh-based company, adding: "There can be no certainty that an offer...will ultimately be forthcoming."

The proposed carve-up would circumvent any potential competition issues in the UK as Heineken withdrew from the mainstream lager market four years ago after a brewing contract with Whitbread to produce the weaker Cold Filtered variant came to an end.

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