By Ian Neubauer
Coca-Cola Amatil (CCA) has inferred it will not accept a proposal by brewer Lion Nathan to acquire CCA for shares and cash valued at approximately $8 billion, saying it contained a number of material deficiencies.
“In particular, the pricing multiple proposed is materially below the recent multiples paid for domestic and international beverage companies, and the CCA board can give no assurance that the proposal will proceed or will be supported by the CCA board or its major supplier, The Coca-Cola Company,” CCA announced in a statement to the Australian Securities Exchange (ASX).
The statement is thought to be a veiled reference to Belgium-Brazilian beverage conglomerate InBev’s recent acquisition of Anheuser-Busch, brewer of Budweiser beer.
After rejecting InBev’s original offer of $44.5 billion, or $67.24 per share, the Anheuser-Busch board secured an additional premium of $5.17 per share, bolstering the final acquisition price by more than $3 billion.
CCA revealed today (November 17) it had received a proposal from Lion 10 days ago for acquisition by way of a scheme of arrangement that offers its shareholders $4.54 billion in cash and 346 million Lion shares.
The proposal represents a 22 per cent premium on CCA’s November 7 closing price of $8.52 per share. CCA’s share price has predictably rocketed since news of the potential merger emerged earlier today, gaining 16 per cent in the first three hours of trading on the ASX.
Lion’s share value has not budged as a result of a self-imposed trading freeze that came into effect today and is scheduled to expire on Wednesday (November 19).