The directors of Coca-Cola Amatil (ASX: CCL) have today backed a proposed $9.3 billion takeover offer from Coca-Cola's European operator.
The proposal of $12.75 per Amatil share to acquire 100 per cent of the company represents a premium of 23 per cent for shareholders, and an enterprise value of $10.9 billion.
While Coca-Cola European Partners plc's (CCEP) offer is conditional on the corporate watchdog greenlighting the deal, Amatil's directors have today given their support to the proposal.
Once due diligence is completed and an acceptable agreement is negotiated Amatil's directors, together with managing director Alison Watkins, intend to unanimously recommend the scheme.
As part of the full takeover of Amatil CCEP intends to enter into a separate agreement with The Coca-Cola Company (TCCC) to acquire its holding in the Australian group in two or more tranches and on less favourable terms than that offered to Independent Shareholders.
CCEP is a strategic bottling partner to TCCC in Western Europe and the world's largest independent Coca-Cola bottler by revenue.
The European business operates in 13 countries, serves 1 million outlets, and more than 300 million consumers.
Amatil earnings momentum bubbling up in Australia
Amatil today gave shareholders a trading update, demonstrating a recovery in earnings momentum in markets where COVID-19 restrictions have eased.
"This has particularly been the cases in Western Australia and New Zealand which have both delivered growth in 3Q20, providing insight on the expected shape of the recovery that can be expected in other markets most notably in other Australian States where restrictions have been slower to ease," said Watkins.
Group trading revenue was down 4.2 per cent in 3Q20 compared to the same time last year.
"It is pleasing to see the improvement in revenue momentum in 3Q20 despite the reinstatement of lockdown restrictions in Victoria and Auckland for a significant part of the quarter," said Watkins.
"This momentum has continued in the first three weeks of October with our Australia and New Zealand both delivering Volume growth (up +1.5 per cent and +1.8 per cent respectively)."
Shares in CCL are up 14.88 per cent to $12.35 per share at 10.05am AEDT.
Business News Australia