Coca-Cola Amatil (CCA) has received a non-binding indicative proposal from Coca-Cola European Partners (CCEP) for the acquisition of all issued shares held by independent shareholders of CCA.
CCEP has put forward a price of $12.75 per share, which equates to an implied equity value of around $9.28bn. The enterprise value of the offer, including debt, is $10.87bn.
CCA chairman Ilana Atlas told an investor and analysts’ briefing that the deal “was a good price” and that independent shareholders should allow CCEP to move forward and carry out its due diligence.
“The Related Party Committee has considered the proposal with the objective of maximising value for the Independent Shareholders and has 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,” Atlas said.
The proposal also includes the separate acquisition of CCA shares held indirectly by The Coca-Cola Company, which together comprises all of the issued share capital for CCA.
CCA said that is confirmatory due diligence is completed and other conditions are satisfied, including CCEP and TCCC reaching an agreement, then CCA intends to unanimously recommend the takeover to its independent shareholders.
CCEP is a leading consumer goods company, a strategic bottling partner to TCCC in Western Europe, and the world’s largest independent Coca-Cola bottler by revenue. CCEP operates in 13 countries, serving one million outlets, over 300 million consumers and employing over 23,300 people.
The current proposal follows a number of previous proposals received from CCEP and it remains conditional.
The $12.75 share price is lower than the $13.07 high for 2020, which came in February just after a strong results delivery and pre-COVID-19. The CCA dipped to a 2020 low of $8.05 the day after the Prime Minister Scott Morrison announced hospitality venues around the country would be closed as a measure to deal with the pandemic.
The share price rallied to $10.75 on Thursday, before CCA requested a trading halt and are already up to $12.38 today on the back of the announcement.
If CCA and CCEP enter into a binding Scheme Implementation Deed, subject to court approval, Independent Shareholders will receive a scheme booklet including an Independent Expert’s Report and will be given the opportunity to vote on the Scheme at a shareholder meeting to be scheduled at a later date.
CCA noted that there is no certainty that the proposal will result in an agreed transaction and that it will continue to keep the market informed of any material developments in accordance with its continuous disclosure obligations.
CCA has appointed UBS as its financial adviser and Herbert Smith Freehills as its legal adviser in relation to the proposed transaction.