Britvic has recommended that its shareholders accept a sweetened £3.3 billion takeover by Carlsberg, the Danish brewer.
The maker of Robinsons Fruit Shoot and J2O has accepted an increased bid after rejecting an earlier approach at £12.50 a share that had valued the business a £3.1 billion.
Carlsberg has now increased its offer to one of £13.15 a share, which represents a premium of 36 per cent to Britvic’s closing share price on the day before the deal was announced and a premium of about 47 per cent to its average share price over the past three months. The offer includes a 25p-a-share special dividend for Britvic shareholders. Shares in the FTSE 250 drinks company closed up by 54p, or 4.5 per cent, at £12.64.
Britvic is the biggest maker of branded still soft drinks in Britain and is the country’s second biggest producer of carbonated drinks. It reported a 6.3 per cent increase in revenue to £502.9 million in the quarter to the end of June, boosted by sales growth of 48 per cent in Brazil, one of its biggest overseas markets.
The business was founded in the 1930s as the British Vitamin Products Company, when a chemist started creating homemade soft drinks in his shop in Chelmsford, Essex, to deliver vitamins to the poor. Today it has 39 brands that are sold in more than 100 countries, including Teisseire, Plenish, Jimmy’s Iced Coffee and R Whites. It also produces and sells Pepsi, Rockstar Energy and Lipton Ice Tea in Britain and Ireland under exclusive agreements with PepsiCo, the American fizzy drinks group.
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Britvic’s bottling agreement with PepsiCo, which gives it exclusive distribution and sales rights to Pepsi brands including 7Up, Pepsi Max and Lipton Ice Tea until 2040, had been a potential poison pill to a takeover. However, PepsiCo confirmed last month that it would not block the Carlsberg deal. After the completion of the takeover, Carlsberg is expected to become the largest PepsiCo bottling partner in Europe.
Carlsberg increased its offer after Aviva, a leading Britvic shareholder, said the Danish company had the “scope to be more generous” with its bid. Kunal Kothari, UK equities fund manager at Aviva, said that investors’ support for a deal “depends on whether the offer price values the business appropriately”.
Ian Durant, Britvic’s chairman, said: “The proposed transaction creates an enlarged international group that is well-placed to capture the growth opportunities in multiple drinks sectors.”
Carlsberg has been looking to expand “beyond beer” as the younger generation seeks alternatives to alcoholic drinks.
The swoop on Britvic is the latest in a succession of bids as foreign companies and investment houses seek bargains in London’s undervalued stock markets, with International Distribution Services, Royal Mail’s parent company, Darktrace, the cybersecurity specialist, Hargreaves Lansdown, the investment platform, and Anglo American, the miner, among a host of UK-listed businesses drawing overseas interest.
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In a separate deal, Carlsberg has bought out Marston’s from the brewing joint venture they formed in 2020 for £206 million. The sale of the 40 per cent stake leaves Marston’s as a pub business. Shares in Marston’s closed up 3¾p, or 12.5 per cent, at 34½p.
