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Britvic suspends share buyback in connection with Carlsberg takeover

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Britvic brand J2O. Image credit: Bloomberg / Getty Images

Britvic announced today (25 June) that it would suspend its share buyback programme following takeover offers from Carlsberg earlier this month.

The owner of the squash club Robinsons announced for the first time on June 3 a share buyback program for its ordinary shares with a maximum amount of 75 million pounds (95 million dollars).

On Friday (21 June) it was announced that Britvic had rejected two takeover offers worth billions in the last three weeks.

The soft drinks group has told investment bank Morgan Stanley that the program will be suspended at the end of UK trading today. It said it would consider resuming the program if circumstances change.

In the last five days of trading on the London Stock Exchange, Britvic’s share price has risen by over 19%. However, at 11:36am BST today, the share price was 0.68% lower at £11.64.

Meanwhile, Carlsberg shares fell more than 8 percent in the five-day trading period.

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Yesterday, Carlsberg and PepsiCo agreed on the bottling rights for the US giant’s products in Great Britain and Ireland in the event that the brewery buys Britvic.

It was reported by The times on June 21 that Carlsberg was preparing a third offer for the group, valuing it at $3.58 billion.

Carlsberg, one of the world’s largest brewers whose portfolio also includes soft drinks, said a deal would enable the group to “capture attractive long-term growth opportunities from Britvic’s extensive portfolio of leading brands in an attractive segment of the drinks market where Carlsberg already has a strong track record”.

The company already markets its own soft drinks, including brands such as Tuborg Squash Light in Denmark, Tuborg Soda in Greece and Xixia in China.

The second offer to buy Britvic represented an implied enterprise value multiple of over 13 times the fruit shoot maker’s adjusted EBITDA of £302 million for the 12-month period ending March 31, 2024, according to Carlsberg.

In Britvic’s half-year results for the 2024 financial year, the company reported a 10.9% increase in revenue to £880.3 million ($1.11 billion) for the six months to the end of March, boosted mainly by “price mix,” but the company also managed to increase volumes.


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