Blog: Chris Brook-CarterCadbury auction failing to fizz

Chris Brook-Carter | 12 October 2005

Cadbury Schweppes’ hopes of tempting one of its drinks rivals into the auction for its European beverage arm look to be dashed. If press reports over the last few days are  to be believed, then the auction of the division that owns Orangina and Schweppes now looks set to be dominated by private equity groups after PepsiCo Inc and Groupe Danone decided not to bid.
Both companies are thought to have shown an initial interest, asking for information on the business, but  subsequently failed to submit offers in the first round of bids. According to a report in the UK’s Sunday Times, both  groups were looking for a private equity partner to launch a combined bid with. Both failed to seal a deal.
With news this week of one-time favourite Carlyle Group also pulling out the auction, it’s not been a great few days for the UK-based confectionary and soft drinks group.

But there is still plenty of interest in the sale - French  buyout firm PAI, Apax, Permira, CVC Capital and BC  Partners are thought to have submitted offers. However,  the loss of the two suitors from within the trade means a  bid driven by the kind of synergies PepsiCo and Danone  could have created from the acquisition is now highly  unlikely.
The bid premium for the division will now no doubt ease.

“They were obviously the favourites for Cadbury so the  pressure is now off for any other interested parties,” one analyst neatly summed up this week.


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