The on-off merger is looking on shaky ground

The on-off merger is looking on shaky ground

Britvic is showing no sign of softening its stance on a merger with AG Barr, despite the latest regulatory green light for the move.

If anything, the Robinsons brand owner appears even less reluctant to get involved in a tie-up. Following the announcement today (9 July) that the UK’s Competition Commission has given final clearance to the deal, Britvic released a new statement that will undoubtedly provoke bafflement, and maybe even the ire, of its potential partners north of the border.

As well as repeating today that Britvic is in a “very different position” to when the merger was first announced last year, chairman Gerald Corbett added: “Britvic's prospects as a stand-alone company are bright.”

This statement is no doubt inspired by an ambitious cost-cutting plan, announced in May, which includes closing three of its sites and merging its UK & Ireland business.

One analyst, however, is continuing to voice his surprise at Britvic’s stance. Cannacord’s Wayne Brown has noted that the group’s underlying performance has worsened, while competition within the UK soft drinks sector is intensifying.  

Britvic insiders are keen to point out, however, that other analysts regard the group as “on the up”, with its share price having improved since last summer's Fruit Shoot recall debacle

With 21 days until the Takeover Panel deadline lapses, the ball is very much in Barr’s court. Britvic would appear not to have totally ruled out the idea of a merger, but sources suggest the Irn Bru maker would have to come up with a more tempting offer than what was originally proposed last November. Indeed, the terms of the original deal have lapsed.

While much of the UK basks in scorching heat this week, I imagine Barr executives could be sweating for different reasons over the next three weeks.

To see just-drinks' full coverage of AG Barr and Britvic's proposed merger, click here.