Coca-Cola European Partners (CCEP) has raised its offer to acquire all issued shares in Coca-Cola Amatil held by independent shareholders from $12.75 to $13.50.
The move follows “intense negotiations” over the weekend, according the the Australian Financial Review.
“The new offer is likely to win over major shareholders such as Dublin-based Setanta Asset Management, Martin Currie Australia, Antares Capital, and Pendal Group,” the AFR said.
It quoted Pendal’s head of equities Crispin Murray as saying he was “satisfied” by the higher price.
“It was a necessary step up which reflects the environment we’re in, where we can see vaccines coming through, pent up demand, potential for a stronger economy, and a better performance from the company itself over the last few months,” Murray noted.
In November 2020, Amatil announced that it had entered into a Scheme Implementation Deed with CCEP. However, a trading update in January revealed that Amatil sales had returned to growth in 4Q20, up 0.4% on the previous corresponding period, while New Zealand volumes surged by 5.2%. From a category perspective, the Coke trademarks delivered strong volume growth, up 4.6% in 4Q20, led by demand for Coca-Cola No Sugar.
The positive Coke results led to analyst speculation that CCEP’s $9 billion offer for the company was in doubt unless the offer price was lifted.
Amatil and CCEP today announce that they have entered into an amendment deed to the SID that provides for an increase from the original total cash consideration. Consistent with the original agreement, the Revised Scheme Consideration will be reduced by the cash amount of any final dividend in respect of 2H 2020 declared and paid to Amatil shareholders before the Scheme Record Date.
CCEP has declared that this is its best and final offer. The Revised Scheme Consideration implies an equity value on a 100% fully diluted basis of approximately $9,828 million and an enterprise value of $11,082 million and represents a 5.9% increase to the original total cash consideration and a 30% premium to the undisturbed one-week volume weighted average price (VWAP) of Amatil shares (calculated to close of trading as at October 22, 2020, being the last day of trade for
Amatil prior to the first announcement of the CCEP lroposal).
Amatil’s RPC and Group Managing Director, Alison Watkins, have unanimously recommended that independent shareholders vote in favour of the revised scheme.
On November 4, Amatil also announced that CCEP had entered into a separate agreement to acquire Amatil shares held indirectly by The Coca-Cola Company (‘TCCC’). There is no change to that agreement and TCCC will continue to receive the original consideration agreed.
Amatil Chairman Ms Ilana Atlas said: “The economic outlook for Australia and New Zealand has improved since the announcement of the original CCEP proposal and recent trading validates our strategy and demonstrates our strong recovery. The value of Amatil has increased and we are pleased that CCEP has acknowledged this in increasing its proposed cash consideration to Independent Shareholders. The RPC and the Group Managing Director unanimously consider that the revised scheme, including the revised price, is in the best interests of independent shareholders.”