Shares in Britvic gained further ground today after Carlsberg appeared to make a significant breakthrough in its quest to acquire the soft drinks giant.
The Danish brewer informed the stock market this morning that it had struck a deal with PepsiCo has “agreed to waive the change of control clause in the bottling arrangements it has with Britvic”.
“This waiver will come into effect should an acquisition of Britvic by Carlsberg, which has the recommendation of Britvic’s board, proceed to completion,” the statement added. “Carlsberg is considering its position. There can be no certainty that any offer will be made.”
The development came shortly after Britvic rebuffed a second takeover proposal from Carlsberg on Friday, declaring that the offer price of 1,250p per Britvic share, or $3.9 billion (£3.1bn), “significantly undervalues Britvic, and its current and future prospects”. The initial approach from Carlsberg, which was received on June 6, was worth 1,200p per Britvic share.
READ MORE: Tennent's boss quits with immediate effect amid €17m charge
Shares in Britvic had leapt further today, and by 4.20pm were up 6.9% on the day, taking the price to 1,169p; shares had been trading at 969.5p before details of the Carlsberg approaches were disclosed on Friday (June 21).
City analyst Russ Mould, investment director at AJ Bell, said the deal Carlsberg has secured with Pepsi is “significant”.
“Britvic shares were in demand as the market waits for the bid situation involving Carlsberg to play out,” Mr Mould said. “News the Danish beer maker has agreed with PepsiCo to waive the change of control clause on the latter’s bottling arrangements with Britvic is significant.
“This is a demonstration of Carlsberg’s commitment to the deal and, given the commercial attractiveness of this bottling contract, could give it the leeway necessary to come back with a more generous offer after being rejected twice so far.”
READ MORE: Glasgow building plans lay the foundations for hope
Mr Mould had on Friday outlined the rationale for Carlsberg’s interest in Britvic, noting that the brewer has been hinting at diversifying beyond its staple beer and lager markets.
“A ‘beyond beer’ strategy is in place and has seen the company explore other avenues such as hard seltzers,” Mr Mould said. “Britvic would effectively act as a springboard to accelerate that diversification and take the company into an adjacent market.
“It has already dipped its toe into the water with soft drinks such as Tuborg Squash Light and Xixia Pineapple & C. Owning Britvic would turbocharge its position in this sector.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel