By Ian Neubauer
Coca-Cola Amatil (CCA) will live to bottle another day after Lion Nathan announced today (Jan 9) it has withdrawn its $8 billion bid to acquire the company.
In a statement to investors, Lion Nathan CEO Rob Murray said he was surprised that CCA’s majority shareholder, The Coca-Cola Company (TCCC) of Atlanta, had ceased discussions with its majority shareholder, Japanese brewer Kirin Holdings, despite what it described as an "attractive" bid.
“We made a very attractive offer at a 30 per cent premium [on CCA shares] in very challenging market conditions,” he said. “It is disappointing that CCA’s shareholders will not have the opportunity to consider our proposal and enjoy the benefits that the merger would have delivered."
But CCA always held the offer was unattractive, saying the proposed pricing multiple of 9.9 times CCA’s 2009 earnings guidance was materially below recent multiples paid for significant beverage makers.
Murray has initiated a number of takeover bids since taking the reigns at Lion Nathan in 2004. In 2005, he launched an unsuccessful bid for South Australian brewer Coopers, which rebuffed it as a hostile takeover. He had better luck in 2007 when he successfully acquired Tasmania brewer James Boag and Son for $350 million.
Lion Nathan shares were trading at $8.47 at 2:00pm today compared to $8.21 seven days ago.
CCA shares rose to a high of $9.60 last week as speculation over Lion Nathan’s bid continued to emit heat, but fell to $8.28 by 2:00pm today.
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