Refresco October approach not preceded by talks (MegerMArket)
10 OCT 2017
PAI’s latest takeover approach for Refresco [AMS:RFRG] was not preceded by deal negotiations, a person familiar with the matter said.
The Refresco board has no specific timeline for its review of the offer and is already busy with the Cott deal, but it strives to be transparent and “cannot sit on the PAI offer”, the person argued. It is therefore aiming for an announcement “in the near future”, he said, without elaborating.
On 3 October, Refresco announced it would review options after the receipt of a new EUR 1.6bn merger proposal. The Dutch bottling group rejected an earlier EUR 1.4bn possible cash offer from PAI in April and has since announced a planned USD 1.25bn takeover of Cott’s [NYSE:COTT] bottling business. It has had no informal talks of any kind with the French private equity firm over this time period, the person familiar said.
Spokespeople for PAI and Refresco declined to comment on the matter.
Refresco’s board in the PAI bid review is using the same advisers that work on the Cott acquisition, the person said. JP Morgan is advising on that deal.
Any PAI bid would be subject to various conditions, according to the announcement. These conditions would not be “out of the ordinary” but rather standard conditions relating to due diligence and the like, the person said without elaborating further.
As reported previously, activist investor Guy Wyser-Pratte argued against the Cott acquisition ahead of the Refresco EGM that eventually approved it last month, claiming that it served as a takeover defence.
However, some analyst research indicates that PAI’s EUR 1.6bn potential offer does not fully pay for the purchase of Cott, Wyser-Pratte told this news service. “PAI still has some room [to improve its offer],” Wyser-Pratte said, arguing for a EUR 22/share deal value.
The EGM vote indicates that investors believe in the Cott deal’s value for Refresco, he noted. Investors representing 78.9 % of ordinary shares voted at the Cott deal EGM, of which 99.5% approved the acquisition. Still, the bottling group owes shareholders a fiduciary duty to look at PAI’s approach properly, Wyser-Pratte argued.
Wyser-Pratte still hasn’t been in touch with Refresco directly, and it seems its arguments about Cott didn’t get much traction with other shareholders, the person familiar said. Refresco started planning the Cott deal well before it was first approach by PAI, he noted.