Coca Cola Amatil has rejected an approach from beer group, Lion Nathan, describing it as "incomplete and non-binding”.
Sydney-based Coca-Cola Amatil said in a statement to the ASX yesterday that the proposal had a "number of material deficiencies".
The offer, 25% above Coca-Cola Amatil’s price on Friday of $8.52, was less than recent multiples paid for beverage companies, the Coke bottler said in the statement.
But CCL didn’t reject it outright. It’s future will depend on more talks. But the US parent of CCL will take some convincing.
The offer was worth $10.35 a share based on Friday’s closing prices for both groups.
CCL shares ended up 12.8% at $9.31 and Lion Nathan shares fell 30c to $8.65. Clearly, the market remains unconvinced by the deal.
Under the bid, Coca-Cola Amatil shareholders would receive $6.15 a share in cash and 0.469 Lion Nathan shares for each share they own.
The offer valued Coca-Cola Amatil at up to $7.66 billion.
Coca-Cola Amatil is 30% owned by US-based The Coca-Cola Company, while Lion Nathan, whose brands include Boag’s, Tooheys and "XXXX”, is 46% owned by Japan’s Kirin Brewery, which also controls National Foods, the dairy group.
Coca Cola, with that dominant stake, will decide if the deal will proceed. It will be a matter of if it wants to work with a Japanese brewery.
Kirin last week said it finalised a $910 million deal to buy milk co-operative Dairy Farmers through its National Foods arm in Australia.
The offer comes a week or so after Lion Nathan’s bigger rival, Foster’s Group, revealed that North American brewer Molson Coors earlier this month had emerged as holder of a 5% interest in Foster’s through Deutsche Bank.
Both Lion Nathan and CC-Amatil have been looking for acquisitions as growth slows.
CC-Amatil recently reportedly missed out on buying the Frucor beverages business in Australia and New Zealand, sold by France’s Groupe Danone. It has also expressed interest in Cadbury’s Australian Schweppes business.
CC-Amatil has broadened its focus from fizzy drinks to include bottled water and canned fruits and vegetables through SP Ardmona.
It also has a beer joint venture, Pacific Beverages, with SAB Miller, which markets and distributes Peroni Nastro Azzurro and Miller Genuine Draft, and has developed a spirits and alcopop business.
Lion Nathan last traded at $8.95, valuing the group at $4.8 billion, while CC-Amatil last traded at $8.25, valuing the group at $6 billion.
