Refresco has entered into negotiations with PAI Partners, hinting it may be open to accepting an improved takeover bid from the private equity group.
PAI Partners returned with a €1.6 billion offer at the beginning of October, having had a €1.4 billion bid firmly rebuked in April.
That amounted to €19.75 per share for 81.2 million outstanding shares.
During the summer, Refresco announced the acquisition of Cott Corporation’s bottling business and, in the process, significantly expanded its presence in North America earlier in the year.
Volume has also risen: it was more than 600 million litres higher in the most recent quarter than it was in the fourth quarter of 2016, shortly before the first offer from PAI Partners, helping revenue to move beyond the €2 billion mark.
Those developments have put Refresco in a stronger position and reignited interest from PAI Partners, whose second bid was reported by FoodBev on 3 October.
Dutch-based Refresco said that, since then, “interaction has taken place with PAI on a number of topics, including the financial and non-financial conditions”.
“The boards will take the interest of all stakeholders into account, and will continue to focus on the closing of the transformational acquisition of Cott’s bottling activities,” Refresco continued.
Analysis: Who are bidders PAI Partners?
Based in Paris, the private equity group claims to have assets under its management worth €7.1 billion and portfolio sales of €14 billion from around 20 European companies with global reach. It’s a former investor in Yoplait, United Biscuits and Chr. Hansen, while its current investments in the food and beverage industry include the ice cream manufacturer R&R. PAI Partners acquired the ice cream company in 2013 for €929 million with a view to turning R&R into one of the world’s leading ice cream companies.
As a result, the group has an interest in Froneri, the third largest ice cream player in the world and the result of a joint venture between R&R and Nestlé.
Until last year, it also held almost all the shares in Swissport, the largest ground and cargo handling company at airports around the world, before selling its stake to a Chinese group for $2.8 billion.
The response to the latest bid has been more measured from Refresco: in April, when PAI Partners first made an approach, the offer was rejected outright with Refresco saying the proposed terms ‘did not merit any further investigation’.
With a second bid now under discussion, PAI’s fortunes are looking stronger.
Whether Refresco holds out for much more than €1.6 billion, or allows the offer to fizzle out, remains to be seen.
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