IRELAND: Analysts downplay C&C takeover prospects
Industry analysts believe a takeover approach for Ireland's C&C Group is unlikely despite market speculation that SABMiller could be interested in making an approach.
Shares in the Magners producer leapt to their highest level in over three months after SABMiller was named as a potential buyer of the company.
However, one analyst told just-drinks that while an offer for C&C could not be completely ruled out, it was "unlikely" that SABMiller would table a bid.
"Never say never but a bid does seem unlikely," the analyst said. "While it is conceivable that SABMiller would look to potentially expand the Magners business in the US, I'm not sure it would be prepared to pay the multiples suggested."
The analyst said that were SABMiller to buy C&C at its current share price, the brewing giant would pay 18 times the Irish group's EBITDA. "SABMiller's last transaction for Bavaria was 10.8 times EBITDA," the analyst said.
SABMiller officials could not be reached as just-drinks went to press. C&C declined to comment on the speculation. Cider sales generate about 80% of C&C's operating profit following booming Magners sales in the UK.
The company is looking to roll out the brand across parts of Europe and is eyeing countries frequented by large numbers of UK tourists, such as Spain.
C&C saw operating profit leap 66% during the first half of the year thanks to the growth in its ciders sales. The company also owns a range of spirits brands, including Tullamore Dew Irish whiskey, and a soft drinks stable including Ballygowan mineral water.
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