Is Permanis becoming a valuable target?

By: Michelle Russell - 8 July 2011 15:19

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It seems that acquisition-busy Asahi Holdings may have a fight on its hands if it wants to secure its latest target, Permanis.

Kuala Lumpur-based CI Holdings confirmed yesterday (7 July) that an offer price made by Asahi Group Holdings for its subsidiary Permanis was too low. The company has not denied the possibility of selling Permanis, but said it is consistently on the lookout for opportunities to further optimise shareholder value.

And why not. Permanis is PepsiCo's bottler in Malaysia. In July last year, PepsiCo extended the rights of Permanis for manufacturing and selling its beverages in Malaysia to ten years until 30 June 2020. In their three years together, the firms have introduced three new PepsiCo brands, namely Tropicana Twister, 7-Up Revive and Mountain Dew, to the Malaysian market, all of which have been received well.

So, there is no reason why CI Holdings would not hold out for a decent price. And it's not like Asahi can't afford it. Despite making two purchases this week, the firm has an overseas M&A warchest valued at US$4.9bn.

But if Asahi is intent on making Permanis its third acquisition in one week, it may need to up its offer. CI Holdings clearly has a figure in mind and does not appear prepared to part with its subsidiary for just any sum.

 

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