- PepsiCo to waive change of control clause in Britvic bottling deals
- Britvic last week rejected a second £3.1bn takeover bid from Carlsberg.
Carlsberg has until 5pm on July 19 to announce its firm intention to make another offer or withdraw.
Carlsberg Group has enhanced its potential acquisition deal with Britvic by securing an agreement with the soft drink maker’s bottling partner.
The Danish drinks giant said in a statement on Monday that PepsiCo had agreed to waive a change of control clause in its bottling deals with Britvic, making a potential takeover of the Tango maker more attractive.
Britvic, maker of Robinsons fruit juices, last week rejected a second £3.1bn takeover bid from Carlsberg, representing a premium of more than 23 per cent to its closing share price in the previous session.
He told shareholders that the 1,250 pence per share offer “significantly undervalues Britvic and its current and future prospects”, giving Carlsberg until 5pm on July 19 to announce its firm intention to make another offer or withdraw.
Carlsberg said it is still “considering its position” and added that there can be no certainty that any offer will be made.
britvic shares added to gains driven by takeover speculation on Monday morning, rising 8.8 per cent to 1,190 pence. They have increased about 40 percent since the beginning of the year.
Carlsberg is seeking to diversify from its traditional beer offering into categories including cider, hard lemonade, hard seltzer and ready-to-drink cocktails amid growing consumer interest.
It told Britvic investors last week that its second offer “represents a compelling opportunity for Britvic shareholders to realize their all-cash investment at an attractive valuation.”
The company is reportedly considering a third bid for Britvic, despite its shares sinking 9 percent on Friday after its bid was rejected.
UBS analysts said the acquisition could “unlock important synergies, particularly in the UK where Carlsberg remains subscale”, as well as diversify its portfolio and “offer cross-selling opportunities”.
However, analysts warned that Carlsberg “does not have a track record of significantly integrating M&A”, while further borrowing to finance the deal would likely rule out share buybacks “for the foreseeable future”.