AUS: Coke Amatil pulls out of Golden Circle talks

By | 5 October 2007

Coca-Cola Amatil has ended its discussions with Golden Circle Limited (GCL) about the potential acquisition of GCL after the fruit processor rejected its revised offer in favour of another bid.

CCA had offered A$1 per share for Golden Circle, valuing the target at about $210m (US$185.7m) including $130m in debt. The bid had already been refused once, but CCA removed a number of unspecified conditions from the offer before re-submitting it on 3 October.

However, yesterday (4 October) Golden Circle chairman Ern Pope said the board had unanimously decided against accepting the adjusted offer in favour of a $35m recapitalisation deal put forward by Anchorage Capital Partners, which will take a 35% stake in the company

In a statement today, the CCA Board said it is not considering a revised offer at this time.

"CCA is disappointed that the directors of GCL have recommended an offer that will not deliver immediate returns to GCL shareholders, which requires a significant turnaround in the operating performance of GCL and which dilutes shareholders through a large share issue at a price 20% less than that offered by CCA," the statement continued.

The managing director of CCA, Terry Davis, said: "The acquisition of GCL would have been a natural strategic fit for CCA. Further rationalisation of the Australian food and beverage industry is critical in order to make it more efficient and competitive against cheaper overseas imports and private label products."

The statement continued: "CCA, with its experience in food processing through its ownership of SPC Ardmona, is confident that the combination of the two businesses would have provided greater certainty for the fruit and vegetable suppliers of GCL, who are also its shareholders, through CCA's plans to dramatically grow the product and distribution base."

Sectors: Soft drinks, Water

Companies: CCA

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