Britvic rejects Carlsberg's takeover offer; shares surge

Investing.com - Britvic (LON:BVIC) announced Friday that it has rejected a takeover proposal by Danish brewer Carlsberg (CSE:CARLb), which the U.K. soft drinks company said undervalued the company.

At 09:25 ET (13:25 GMT), Britvic shares traded almost 7% higher at £10.83 a share, having climbed as high as £11.76 during the session.

The company, whose brands include J20 and Robinsons, said Carlsberg had made two takeover proposals this month, with the last cash offer at £12.50 a share - resulting in a takeover offer around £3.1 billion in size.

Britvic said its board had rejected the proposal made on June 11 as well as an earlier approach of £12 a share received on June 6, saying they undervalued the company.

Under takeover rules, Carlsberg must announce its plan to make a formal offer for Britvic by July 19 or walk away.

“The deal would push Carlsberg pro-forma ND/EBITDA to 2.8x pre-synergies, 2.6x post synergies, and whilst it would be EPS accretive, it represents a shift in the strategy away from organic top- and bottom-line growth and consistent returns to shareholders,” said analysts at Jefferies, in a note. 

“We do not rule out the risk of a higher offer, which will likely weigh on the share price.”

The bank added that the deal would likely be subject to antitrust scrutiny, but “we do not believe that there would be significant remedies. Carlsberg has a c.10% market share of UK beer, Britvic is the #2 in soft drinks after CCEP [Coca-Cola Europacific Partners].”

Jefferies maintained a ‘buy’ rating and DKK1,100 price target on Carlsberg. Its stock fell over 8% to DKK865.80.