C&C a potential bidder for Britvic drinks group

Irish drinks and snacks group Cantrell & Cochrane (C&C) may bid for the Britvic soft drinks group in Britain, which is for sale by its joint owners Allied Domecq, Bass and Whitbread.

If C&C bids, it is likely to face intense competition from both trade and financial buyers for Britvic, which has a portfolio of strong soft drink brands. Drinks industry analysts have suggested that Britvic, which had pre-tax profits of £46 million sterling (#74 million) on sales of £539 million sterling last year, could fetch in excess of £300 million sterling.

C&C managing director Mr Tony O'Brien said he had been aware that Britvic's shareholders planned to sell their shares in the company. "For C&C, it's the same sort of business as we're in. We would have an interest and will definitely take a look if and when a dossier on Britvic is circulated."

He added that Britvic already distributed C&C's Ballygowan mineral water in Britain and also had the same 7-Up and PepsiCola franchises in Britain as C&C has in Ireland. Britvic also has the Tango and Robinson's brands and last year acquired Orchid Drinks, whose brands include Ame, Purdeys and Aqua Libra.

Industry sources said other drinks groups such as Matthew Clark and Cadbury Schweppes would be likely bidders while the company was also likely to come under the eye of various private capital groups.

One complication is that only the 90 per cent held by Allied Domecq, Bass and Whitbread is for sale and uncertainty surrounds the intentions of PepsiCola, which owns the remaining 10 per cent. Pepsi-Cola has hinted, however, that it is unlikely to bid for the 90 per cent of Britvic that is for sale.

A takeover of Britvic would be an enormous move for C&C, but Mr O'Brien suggested finance would not be a problem if C&C was to bid. "If you have a good proposition, there is plenty of money out there," he said.

He added that C&C's proposed flotation - which has been put on the long finger because of market weakness - would not necessarily be reactivated in tandem with a major acquisition. "We would look at Britvic in isolation," he said.

Analysts suggest a bid for a company the size of Britvic might be difficult to construct on a purely debt basis and that a company of the size of C&C might have to raise equity through a flotation either at the same time as the acquisition or shortly afterwards.

If a deal could be constructed, it would transform C&C as Britvic had sales last year of #860 million compared with C&C's #670 million, and pre-tax profits of #74 million compared with C&C's pre-amortisation pre-tax profits of #48.3 million.