Carlsberg shares fell sharply on Friday after the British soft drinks maker Britvic said it had rejected the Danish brewer’s £3.11 billion ($3.9 billion) takeover proposal.
Shares of Carlsberg were down 9% by the close, with Britvic surging by the same amount. Earlier in the session, Britvic announced it had on June 17 refused an improved cash takeover bid from Carlsberg offering 1,250 pence per share of the British soft drinks maker. It said the proposal “significantly undervalues Britvic, and its current and future prospects.” This was Carlsberg’s second bid, after its June 6 offer price of 1,200 pence per Britvic share was also declined.
Carlsberg confirmed the rejection of its second proposal, which it qualified as “a compelling opportunity for Britvic shareholders to realise their investment in full in cash at an attractive valuation.” The Danish brewer said it will be considering its position.
Carlsberg now has until July 19 to make a firm offer or walk away from the transaction.
The brewer noted that the potential transaction was in line with the company’s long-term growth strategy outlined earlier this year — a key point of which is expanding beyond its core portfolio of beers, lagers and ales. The company’s “beyond beer” product portfolio, including the Somersby apple cider and Garage hard seltzer brands, represented just 2% of its total volumes as of February. Comparatively, the company’s largest brand, Tuborg, accounts for roughly 15% of total volumes, with the eponymous Carlsberg beer at 10%.
Britvic, the owner of British staple brands Robinsons squash and soft drink Tango, also holds exclusive 20-year franchise bottling rights in Britain for the carbonated brands of U.S. food and beverages titan PepsiCo, under a deal inked in October 2020. Carlsberg has a similar relationship with PepsiCo in Norway, Sweden, Switzerland, Cambodia and Laos, and it is also the bottler of rival Coca-Cola in Denmark and Finland.