COPENHAGEN (Dow Jones)--Icelandic investment company FL Group (FL.IC) Wednesday upped its stake in Royal Unibrew A/S (RBREW.KO), Denmark's second-largest brewer, for the second time in two weeks.
FL Group, which has been shopping for Danish investments, increased its holding in the Faxe-based company to 16.35%.
On Feb. 20, the group announced that it had purchased a 10.7% stake in Royal Unibrew, whose brands include Royal Pilsner, Albani and Ceres.
Wednesday's purchase gave a lift to Royal Unibrew's shares, which have been climbing steadily since February.
Royal Unibrew shares closed up DKK18, or 2.7%, to DKK678, in a modestly higher market. The Danish blue-chip index was up 0.7%.
"We believe in the company, and we believe in the brewery business," FL Group Chief Executive Hannes Smarason told Dow Jones through a spokesman.
Smarason declined to comment on whether FL Group would continue to raise its stake in Royal Unibrew or make a play for the entire company.
"I think it's a financial investment," one analyst said.
FL Group - which in November raised 44 billion Icelandic krona ($1=ISK65.125) after issuing new shares to institutional investors - also last month purchased an 8.2% stake in one of Denmark's premier design companies, television and stereo maker Bang & Olufsen A/S (BO-B.KO). Last year, it acquired in its entirety the Danish airline Sterling A/S.
Meanwhile, Royal Unibrew for several years has been the subject of takeover speculation, partly because of a deal with Heineken (00897.AE) to bottle and distribute the Dutch's company's flagship beer in Denmark.
The Danish company also has taken steps over the years to bolster its position in Denmark, consolidating smaller brewers. To expand beyond its home country, Royal Unibrew's bought breweries in Poland and Latvia.
In the third quarter, it reported a 1.4% dip in net profit to DKK136 million on an 8.2% rise in net sales to DKK908 million.
"Royal is still a buyout candidate," wrote Handelsbanken in a January note. It added, however, that "we believe this is more than a year away, as Royal needs to strengthen its Nordic/Baltic platform before the likelihood of an industrial-led takeover becomes realistic."
Company Web site: http://www.royalunibrew.com
-By Frances Schwartzkopff, Dow Jones Newswires; +45 33 11 15 24; firstname.lastname@example.org
(END) Dow Jones Newswires