UK drinks maker Britvic rejects second takeover bid from Carlsberg

Robinsons owner Britvic has rejected a £3.1bn bid from Carlsberg, the second offer made by the Danish brewer in a matter of days.

Britvic, which is based in Hertfordshire, said it received a proposal from Carlsberg for the whole business on June 11. The UK FTSE 250 company told the stock exchange on Friday morning: “The board together with its advisers carefully considered the second proposal, and concluded that it significantly undervalues Britvic, and its current and future prospects.”

The bid valued the company at 1,250p per share, or £3.1 billion and the news sent shares in Britvic 15% higher to 1,167p during early trading on Friday (21 June).

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The announcement comes a week after Britvic, whose brands also include J20 and Fruit Shoot, rejected a 1,200p per share approach from Carlsberg.

The UK company posted strong revenue growth in May, which was underscored by demand from its products from international markets.

Other London-listed soft drinks, including Irn Bru maker AG Barr and tonic maker Fevertree, also saw their share prices rise in early trading. 

What would the deal mean for investors? 

Carlsberg issued a separate statement confirming the move to its investors, saying it believes there could be long-term growth opportunities from a deal.

The Danish company said: "Carlsberg believes that the proposal represents a compelling opportunity for Britvic shareholders to realise their investment in full in cash at an attractive valuation."

Looking forward, Britvic said it would continue to consider any further proposal, but that the board remained “confident” in the current and future prospects of the company.

Under takeover rules, Carlsberg has to declare its intention to make a formal offer for Britvic by 19 July or walk away.

Carlsberg trying to deepen ties in the UK 

The bid comes four years after Carlsberg significantly expanded in the UK through its £780 million joint venture deal with Marston's, creating the Carlsberg Marston's Brewing Company, which makes brands including Hobgoblin and Pedigree.

Britvic was founded in the UK in the 1930s. It sells its drinks in Britain, Ireland, Brazil and other international markets such as France, Middle East and Asia. 

In 2020 Britvic reached agreement with PepsiCo for a new and exclusive 20-year franchise bottling agreement for the production, distribution, marketing and sales of its carbonated soft drink brands in the UK - including Pepsi, 7UP and Mountain Dew.

Carlsberg said in a statement: “We believe that the potential transaction would enable the company to capture appealing long-term growth opportunities from Britvic's comprehensive portfolio of leading brands.”