World News – UA – Amatil leaves the door open to counter-bidders

Coca-Cola Amatil has ruled out going up for sale but believes nothing is preventing other potential suitors from making an offer to compete with Coca-Cola European Partners’ $ 9 billion offer

The offer was conditionally backed by the directors of Amatil and its largest shareholder, but industry players have asked why Amatil, after a series of approaches from Coca-Cola European Partners in 2019 and 2020, no did not conduct an auction in order to maximize the price for external shareholders

After rejecting CCEP’s initial offer for less than $ 10 a share last year, Amatil’s independent directors unanimously agreed to support CCEP75’s stock improvement of $ 12 in cash , under conditions

Coca-Cola Amatil CEO Alison Watkins (left) and President Ilana Atlas have left the door open for other potential suitors James Brickwood

« If the board had no confidence in growth, why didn’t it make a proper business sale, » a source said

« Why didn’t they go to [South American bottler] Coca-Cola Femsa or [Chinese bottler] Swire Beverages and do they have a proper auction process – you only get one chance to sell, why not sell to others « 

However, sources close to Amatil said the suggestions that he should have started a sales process were « naive » and ignored his close relationship with The Coca-Cola Co, based in Atlanta, which is the bottler’s largest shareholder with 308%, its franchisor, leading supplier and marketing partner

They also said a sales process would be disruptive, especially when Amatil faced the challenges created by COVID-19, and there was no guarantee of a deal

On the contrary, Amatil had left the door open to other potential bidders by accepting, as part of the program implementation act, a severance indemnity corresponding to half of the industry standard and insisting that there was no « no communication » restriction in the implementation act which would prevent it from engaging with other bidders

« If anyone wants to get out of the woodwork, the ACC can engage with that part – we have limited barriers for that to happen, » a source said.

Depending on the plan implementing act, the proposal agreement can be terminated if the majority of Amatil’s independent directors withdraw their recommendation or publicly state that they no longer recommend the transaction or recommend a competing proposal

Amatil has agreed to pay CCEP a break fee of 05 percent of his net worth – $ 45 1 million – if the majority of his independent directors do not recommend the offer or recommend a competing offer

Sources said TCCC preferred CCEP over other major bottlers such as Mexico-based Coca-Cola Femsa and Switzerland-based Coca-Cola Hellenic due to its expertise in developed markets similar to Amatil

Femsa is larger than CCEP in volume, but its markets are emerging markets in Latin America, while Hellenic, the third largest bottler, supplies markets such as Italy, Greece, Austria, ‘Northern Ireland and the Republic of Ireland and Switzerland

« There’s nothing stopping anyone from making an offer, but they know they need TCCC approval, » a source said

CCEP’s offer, which values ​​Amatil at around $ 9 billion, is subject to a deal and must be approved by 75% of the shares voted

As TCCC will not be able to vote its 308 percent stake, the deal could fall if only 173% of the shares vote against the offer

No individual Amatil shareholder has enough shares to block the deal on their own, but some have hinted at dissatisfaction

Amatil index funds, passive investors and retail investors expected to vote in favor of the deal

But several investors, including Martin Currie Australia, which owns 35% of the shares and Antares Capital, said the offer was disappointing and opportunistic

Other investors, such as Pendal, only bought Amatil shares recently and believed the share would reach the CCEP offer price on its own as cafes, restaurants and shops reopened and that consumers were buying more drinks on the go

Meanwhile, Amatil missed out on buying a suite of beer and cider brands from Japanese brewer Asahi, even though he was considered the frontrunner last week, before news of the offering CCEP be announced

Brewery giant Heineken acquired three cider brands and Australian rights to international beer brands Stella Artois and Beck’s from Asahi, who was forced to sell the brands to gain regulatory approval for its acquisition by Carlton & United Breweries for $ 16 billion

Amatil declined to comment on the transaction and it is unclear whether Amatil was outbid by Heineken, whether the soft drink bottler withdrew its offer as a result of the proposed CCEP offer, or if it kept his powder dry to bid Lion Dairy & Drinks flavored milk brands

Amatil President Ilana Atlas said on Monday that CCEP’s proposal did not prevent the bottler from making targeted acquisitions

« We have agreed with CEP on terms that would allow us to continue to move forward all important transactions that make strategic sense and add long-term value, » she said

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