Coca-Cola Amatil would be sold to the London-based European arm of Coca-Cola under a $9.3 billion deal that has all the hallmarks of an asset swap inside the global Coke empire.
Under the proposed deal, confirmed on Monday, Amatil shareholders would receive $12.75 cash a share, which equates to a 23% premium to the one-week volume-weighted average price of its shares.
Coca-Cola Amatil shares last traded on Thursday last week at $10.75, before the company requested a trading halt in its shares early Friday morning. The shares jumped to $12.50 after the announcement.
The implied value shares are $9.28 billion. Including debt is the value is $10.87 billion.
The deal to buy the Amatil shares would be via a scheme of arrangement. Coca-Cola Amatil’s independent directors intend to unanimously recommend the proposed scheme of arrangement, subject to a range of conditions.
They would have to recommend it, the share price is the highest CCA shares have been for more than seven years.
To acquire Amatil in full, the European offshoot will buy The Coca-Cola Company”s stake in CCA.
Documents released yesterday for the bid confirm that they have already happened.
Amatil released a letter indicating that on October 25 the US parent and the European arm of Coca-Cola entered into what was described as a “co-operation letter” in respect of the proposed deal.
The Coca-Cola Company currently owns about 30.8% of Amatil’s shares, so the US drinks giant and the European arm have become associates in respect of Coca-Cola Amatil.
This means that the European arm now has 30.8% voting power in relation to Amatil’s shares and the bid is a done deal.
A rival bid will not emerge because of that deal and the fact that the parent company controls the most important assets in the company – the right to The Coca Cola Company’s range of soda drinks. Without those, there’s no viable CCA.