Britvic, the UK-based soft drinks manufacturer, has confirmed it recently rejected a takeover proposal from Danish brewing giant Carlsberg. The offer, valuing Britvic at £1.25 billion, marks the second attempt by Carlsberg to acquire the company in less than a fortnight.
On 11 June, Carlsberg tabled an unsolicited cash offer of 1,250 pence per share for Britvic’s entire issued and to-be-issued ordinary share capital. This followed a previous bid of 1,200 pence per share on 6 June, which was also rejected by Britvic’s board.
Britvic’s board unanimously rejected the latest proposal on 17 June. The company stated that the offer “significantly undervalues Britvic and its current and future prospects”.
Britvic shares were 10% higher at the time of writing.
“Britvic believes its products are probably the best soft drinks in the world because it is not letting Carlsberg rock up and buy the company on the cheap,” said AJ Bell investment director Russ Mould.
“Trading on just 15 times earnings before revealing the bid approach, Britvic is a classic example of a company that quietly got on with the job. There was no glamour around its products, investors didn’t hype up the stock, and it sat quietly on the UK market slowly growing sales and revenue. Often, it’s only when something is taken away that you miss it, and investors might take that view if Britvic was gobbled up and delisted.
“Carlsberg is not the first company you would suggest when trying to compile a list of potential buyers for Britvic. It is known for selling beer and lager, but there have been hints it wanted to diversify.
“A ‘Beyond Beer’ strategy is in place and has seen the company explore other avenues such as hard seltzers. Britvic would effectively act as a springboard to accelerate that diversification and take the company into an adjacent market.
Under UK takeover rules, Carlsberg now faces a deadline of 19 July to either announce a firm intention to make an offer or declare it will not proceed. This timeline can be extended with the consent of the Takeover Panel.