I've been a holder here for over a decade. To my mind Britvic always looked a bit of a highly leveraged orphan with a balance sheet that's always looked stretched from Day 1 of its flotation. The fact that it's prospered through thick and thin is, in my view, a tribute to good management of what is undoubtedly a very profitable business sector. It is only when a third party comes along with a bid that a light comes on to illuminate what is/has really been going on in the business. Whatever happens with the Carlsberg situation, attention has now been drawn to the true worth of the Britvic business. I believe it now to be in play and its low profile share price is probably a thing of the past. |
Exactly hopefully we get a 1400p offer and everyone is happy. Hard to see why they would RNS the agreement with Pepsi otherwise. |
#Blueclyde, just sat on my hands here waiting to see the 1300/1350/1400 bid land.. :o) |
Closed at a new all time high, on high volume. Suggests word is getting out that this will happen at just what price now? |
Yep RNS this morning with the share count to be used. Surely just a matter of agreeing the price? |
Hoard cash, strengthen the balance sheet in the face of a bid..
Share count now fixed, a 3rd bid inbound..? |
I feel 1400p and the buy back paid as a special is the deal. |
That feels very significant and definitely opens the door for a special dividend payment too. |
Buyback cancelled. There is another £75 million that could be paid to shareholders as a special to sweeten the deal. |
I guess then that is even more solid evidence that Carlsberg will put forward a decent third offer to get the deal done if they already have an existing relationship. We have seen previous deals for UK companies recently where there has been a bidding war that have been nowhere near the quality of Britvic. I would be surprised if we did not see a quick fire third bid this week to get it wrapped up before others circle seems to me to be just a question of an acceptable price. |
https://amp.theguardian.com/business/nils-pratley-on-finance/article/2024/jun/24/britvic-should-play-hardball-no-fruit-shoots-on-the-cheap-for-carlsberg |
I'm not sure if Pepsi would necessarily be so accommodating to another bidder. It has existing agreements with Carlsberg
"The Sunday Times has reported that Pepsi is understood to be open to Carlsberg taking over Britvic because the Danish brewer bottles its soft drinks in other regions." |
I think things are going to get interesting here. Only in Brexit Britain could one think selling at 13 times earnings is a high price considering that the US500 trades on a PE just shy of 25. What that means is this may be on the radar of a US company who can easily offer 1600p plus in stock and it would be a bargain for them. News that Pepsi are willing to let the license roll to another buyer suggests that there could be a bidding war in my opinion. |
 Barclays said the Britvic Carlsberg deal "lacks fizz" for the Copenhagen beer behemoth.
"Whilst our analysis suggests the deal does have financial merits we are conscious of execution difficulties around integrating beer and soft drinks companies, as shown by similar deals historically," analysts at the bank said.
They think a valuation "between 1,300-1,350p would be more attractive", with the second offer of 1,250p on Friday representing 13.1 timesEBITDA multiple, "which is above recent precedent transactions".
UBS analyst Sanjeet Aujla said the positives for Carlsberg could "unlock significant synergies, particularly in the UK, where Carlsberg remains subscale", as well as diversifying its portfolio and delivering cross-selling opportunities.
"On the negative side, we note: 1) Carlsberg has no track record of significant M&A integration; 2) higher leverage means no buybacks for the foreseeable future; 3) the higher multiple Asia exposure would be diluted; and 4) Britvic is not topline growth accretive."
proactiveinvestors.co.uk |
I would say at least 1400p maybe 1500p and everybody walks away happy. It's a great compounding business for the long term. |
We will have to wait for the offer, 1300 looks more likely from 1200/1250, but they could come back with a knockout bid the BOD cannot refuse..? our options will then be to sell into it and take the money in the absence of an X for X share swap offer..? |
Agree Typo56, looks more like 1300 to me or they play around with shares plus cash. |
I'm inclined to think Carlsberg will bid (unless they find something ugly in DD) but 1,400p is a big hop from 1,200p then 1,250p. |
Yes, that £14 mentioned in the article would do the trick IMHO |
Same article |
The non paywall archive link to The Times story
The story sounds good news, although does it reduce the possibility of Pepsi making a counterbid? If Pepsi wanted to counterbid, wouldn't they consider threatening to pull the plug on the distribution agreement, were Britvic to be acquired by a rival bidder? |
This one has to open quite a bit higher tomorrow morning in my view. It looks to me to be yet another example of under-valued UK company being gobbled up by overseas interests. |
#Dozey4, thanks for adding some colour to that, it was behind the paywall and what I was looking to read, both parties have a common interest in the existing relationship and maintaining it IF there is a change of BVIC ownership, this smooths the path for Carlsberg should they come back with a 3rd offer, however I would have expected their due diligence to flag this up and green light it before the 1st offer was tabled..
An interesting month ahead here.. :o) |
No - Pepsi haven’t “taken an interest”. BVIC has a bottling/distribution contract with Pepsi with a break clause. Aiui this means any change of control at BVIC triggers an option for Pepsi to walk away from the agreement. The ST reports that Pepsi have said they won’t do so, but are happy for Carlsburg to gobble UP BVIC. |
#Pilanderer, that is behind a paywall for me but interesting to see a major like Pepsi taking an interest, could be a bumpy ride for a month while this plays out..Getting the timing right to step off and lock in gains is coming next then sit back and watch.. :o) |
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