Coca-Cola Amatil has received a $9 billion non-binding indicative proposal from Coca-Cola European Partners (CCEP) of $12.75 cash per share. Amatil chair Alana Atlas said CCEP had been interested in Amatil for some time and that the current proposal follows a number of others from the company.
CCEP is the world’s largest independent Coca-Cola bottler by revenue, employing more than 23,000 people and operating in 13 countries. It is listed on Amsterdam, New York, Madrid and London stock exchanges and headquartered in London. It has a market capitalisation of $25 billion.
The proposal is for the acquisition of all issued shares held by independent shareholders subject to a scheme of arrangement and the separate acquisition of Amatil shares held indirectly by The Coca-Cola Company.
While both agreements would be entered into at the same time, the terms offered to TCCC would be less favourable than the terms offered to independent shareholders, Amatil said.
Amatil’s related party committee (RPC), comprised of all Amatil’s independent non-executive directors (excluding TCCC’s nominee directors) have considered the proposal.
Atlas said: “The RPC has considered the proposal with the objective of maximising value for the independent shareholders and ha unanimously determined that, based on the current price and conditions of the proposal, it is now in the best interests of independent shareholders to allow CCEP to undertake confirmatory due diligence and further negotiate transaction documentation in order to determine if a binding proposal can be presented to independent shareholders.”
For CCEP, the acquisition creates a “broader and more balanced” footprint, almost doubling its consumer reach and giving it the opportunity to expand into the Asia market.
Amatil also provided a trading update, reporting group trading revenue being down 4.2 per cent in 3Q20 compared to the prior corresponding period (pcp), which Amatil group managing director Alison Watkins said was an improvement on the 9.2 per cent reported at 1H20.
Group volume was down 5.4 per cent in 3Q19, an improvement on the 11.6 per cent decline at 1H20 and the 33 per cent decline in April.
Watkins said it was a pleasing result considering the reinstatement of lockdown restrictions in Victoria and Auckland for a large part of the quarter.
Australia and New Zealand both recorded volume growth (+1.5 per cent and +1.8 per cent respectively) in the first three weeks.
