UK: Cadbury Schweppes coy on drinks sell-off talk
Cadbury Schweppes has refused to comment on speculation that it may sell off its drinks business.
The UK-based drinks and confectionery group is at the centre of rumours surrounding the future of its beverage operations, which are based in the Americas and Australia.
A report in the UK newspaper The Times claimed today (14 March) that US billionaire Nelson Peltz has held talks with Cadbury's management over his purported plans to split the two sides of the business.
Yesterday, Cadbury, the owner of the Dr Pepper and 7-Up brands, confirmed that Peltz had bought just under 3% of the company.
However, a Cadbury spokesperson stayed silent on the reports of a possible break-up of the company. "We have no comment on that," she told just-drinks.
The Times also claimed that Cadbury had already told its financial advisers, including Goldman Sachs, to prepare the ground for a possible spin off of its drinks business.
However, a spokesman for Goldman, which last year advised Cadbury on the sale of its European drinks operations, also refused to be drawn on the reports. "We won't comment on that," he told just-drinks from London.
One analyst told just-drinks that a break-up of Cadbury's drinks and confectionery business was "clearly doable" but was unsure whether such a move would go ahead.
"Management has to be confident it can extract a premium for the business over and above what it gets from owning it," Investec's Martin Deboo said.
"(Cadbury) doesn't have a textbook position in the market but given that relatively weak position, it has performed very well," Deboo said. "Cadbury has turned around 7-Up, consolidated its bottling operations and grown its carbonates share as Coke and Pepsi have fallen."
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