Search ASX code:
Generic filters

Search ASX code:
Generic filters

Search ASX code:
Generic filters

Search ASX code:
Generic filters

Coca Cola Amatil (ASX:CCL) takeover, share price to pop

The Coca-Cola Amatil Ltd (ASX: CCL) share price is popping this morning after receiving a takeover offer from Coca Cola European Partners.

Coca Cola Amatil is the Australian listed business that is responsible for Coke products in the Asia-Pacific region.

The takeover offer

Coca Cola Amatil said that it has received a non-binding, indicative proposal from Coca-Cola European Partners plc (CCEP).

CCEP is offering to buy all of the shares of Coca Cola Amatil held by independent shareholders for $12.75 cash per share (less any final second half dividend declared and paid before the takeover).

CCEP will also buy the shares owned by The Coca Cola Company (TCCC), which would be on less favourable terms than the one offered to the independent shareholders.

Due to TCCC’s involvement in the proposed transaction, Coca Cola Amatil’s ‘Related Party Committee’ (RPC) consisting of all the independent non-executive directors (other than nominee directors of TCCC) has considered the proposal.

If satisfactory due diligence is completed, as well as other conditions satisfied (including CCEP and TCCC entering into an agreement for TCCC’s shares), then Coca Cola Amatil’s RPC and managing director Alison Watkins intend to unanimously recommend the takeover as long as there isn’t a better offer and an independent expert concludes the takeover is fair and reasonable.

Trading update

Coca Cola Amatil also provided a third quarter trading update as part of the takeover announcement.

The company said that third quarter volume was down 5.4% on the prior corresponding period. Australia NARTD (non-alcoholic ready to drink) volume was down 2%, Pacific volume was up 1.8% and Indonesia & PNG volume was down 13%.

At the end of the third quarter, the year to date group volume was down 9.7% on the prior corresponding period. However, this was an improvement on the half year volume decline of 11.6%.

Looking at the actual revenue, third quarter revenue was down 4.2% to $1.1 billion. Year to date revenue was down 7.6%, which was better than the decline of 9.2%.

The company said that there has been a continued improvement in New Zealand and Australia as the recovery from COVID-19 gathers pace.

The balance sheet showed that net debt was $1.745 billion, $82 million better than the prior corresponding period. The company said said it has sufficient liquidity to repay all debt maturities over the next year and a half. The interim dividend of 9 cents per share was paid a couple of weeks ago.

Summary

This is an exciting offer for shareholders. Aside from a few days before the COVID-19 crash, the Coca Cola Amatil share price hasn’t been as good as the offer price since 2013. I’d want to sell my shares soon and put it into other ASX dividend shares like Brickworks Limited (ASX: BKW).

The Rask analyst team has launched its most ambitious investing mission of all time...

Find (and buy) Australia's 10 best small-cap shares.

Our analysts have identified 10 ASX shares that could potentially return multiples of the initial investment over the next 10 years. But make no mistake, this mission isn't for the feint of heart. It's a high-risk mission for serious investors only.

The Rask Rockets program is our most advanced, most highly valued ASX investor research service.

And guess what, we've given away 1 free Rask Rocket Beyond share idea, plus one of our best Rask Rockets Apollo mission companies and another one of our top stock ideas from Rask Invest -- all FREE! You can get the stock ideas by listening to a recent episode of Australian Investors Podcast, as part of our Beyond re-opening sale.

Just click here to get the names and ASX stock ticker codes of 3 of our team's best stock ideas.
At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

LIVE ASX Chat - Join in!

Play Video

Keep reading: