UK: Britvic sees share coverage upped

By just-drinks.com editorial team | 16 May 2007

Britvic has had its coverage raised.

The soft drinks company, which earlier this week purchased C&C's soft drink business in Ireland and Northern Ireland, has seen its rating upped to 'buy' from 'hold' by Citigroup today (16 May). The broker also increased its price target for Britvic to GBP4.25 from GBP3.35 following the acquisition.

Incremental cost savings from the deal also led Citigroup to up its 2008-11 EPS estimates by 8-24%. The broker said that, with Britvic's track record, it believes this should be more than achievable.

Citigroup also suggested that Britvic may be able to branch into Continental Europe if it proves successful in Ireland, where PepsiCo supports the C&C deal. Britvic may be able to pursue further Pepsi franchise consolidation in other markets, the broker noted.

Earlier this week, Britvic spent EUR249.2m (US$337.5m) on C&C's soft drinks and distribution business. Among the brands sold in the deal are Ballygowan water, Cidona, MiWadi, and Energise Sport. Britvic also takes control of the rights to Pepsi and 7Up brands in the countries.

Sectors: Soft drinks, Water

Companies: PepsiCo