Investing.com – Britvic (LON:) announced on Friday that it has rejected a takeover proposal from Danish brewer Carlsberg (CSE:), saying it undervalued the company.
At 09:25 ET (13:25 GMT), Britvic shares were trading almost 7% higher at £10.83 per share, having risen as high as £11.76 during the session.
The company, which has brands including J20 and Robinsons, said Carlsberg had made two takeover proposals this month, with the latest cash offer at £12.50 per share – resulting in a takeover bid of around £3.1 billion.
Britvic said the board had rejected the June 11 proposal, as well as an earlier approach of £12 per share received on June 6, because they had undervalued the company.
Under takeover rules, Carlsberg must announce its plan to make a formal bid 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 while it would boost earnings per share, it represents a shift in strategy away from organic revenue and earnings growth and consistent returns for shareholders,” Jefferies analysts said in a note.
“We cannot rule out the risk of a higher bid, which will likely weigh on the share price.”
The bank added that the deal would likely be subject to antitrust investigation, but “we do not believe there would be significant resolutions. Carlsberg has a market share of approximately 10% in British beer, Britvic is number 2 in soft drinks after CCEP [Coca-Cola Europacific Partners].”
Jefferies maintained a buy rating and a price target of DKK 1,100 on Carlsberg. The share fell by more than 8% to DKK865.80.
