Britvic Rejects Carlsberg's Takeover Offer; Shares Surge
Britvic, a leading UK soft drinks company, has turned down a takeover proposal from Carlsberg, saying that the offer didn't reflect the company's true value. Following this news, Britvic's shares saw a nearly 7% increase, trading at £10.83 a share, and even touching a high of £11.76 during the trading session.
Details of the Rejected Offer
Britvic, known for popular brands like J20 and Robinsons, revealed that Carlsberg had made two proposals this month. The most recent cash offer was set at £12.50 per share, valuing the total takeover bid at around £3.1 billion. However, Britvic's board decided to reject this offer, along with an earlier one of £12 per share received on June 6, citing that both offers undervalued the company.
Upcoming Deadlines
According to takeover rules, Carlsberg must announce its formal plan to make an official offer by July 19. If they fail to do so, they will have to walk away from the potential deal.
Analyst Insights
Analysts at Jefferies noted that accepting Carlsberg's offer would push their pro-forma ND/EBITDA to 2.8x pre-synergies and 2.6x post-synergies. They also mentioned that while the deal would be EPS accretive, it represents a shift in Carlsberg’s strategy away from organic growth and consistent shareholder returns.
Jefferies added, “We do not rule out the risk of a higher offer, which will likely weigh on the share price.” However, the bank mentioned that any such deal would likely be subject to antitrust scrutiny, but significant remedies were not expected since Carlsberg is majorly in the UK beer market and Britvic is the second largest in soft drinks, following Coca-Cola Europacific Partners.
Impact on Shares
Jefferies maintained a ‘buy’ rating and a price target on Carlsberg. Despite this, Carlsberg’s stock fell by over 8%, trading at DKK865.80.
Conclusion
With Britvic rejecting Carlsberg's offer and shares surging, the coming weeks will be crucial. Carlsberg has until July 19 to decide on a formal bid, and this development will be closely watched by investors and analysts alike.
In this article, we've covered the key details of Britvic rejecting Carlsberg's takeover offer, the market reaction, and insights from analysts. For housewives and all readers, the simple takeaway is that Britvic believes their company is worth more than what Carlsberg offered, leading to a rise in their share prices. Keep an eye out for whether Carlsberg will improve their offer or step back by the set deadline.
