Nothing but negotiation

The Gap Partnership

Drinks firms merger in doubt after shareholder complaint

A shareholder in Britvic has criticised the proposed terms of the merger deal with AG Barr.

12 November 2012

The projected merger between drinks firms AG Barr and Britvic may be less likely to go ahead after the eighth largest shareholder in Britvic criticised the plan.

Harris Associates, which owns 3.4 per cent of shares in the firm, said it was unhappy with the proposed deal that the business negotiations have produced.

Its chief investment officer David Herro told the Sunday Times: "The share ratio was poorly negotiated in our view and it has not been properly explained as to how the companies came up with that ratio."

The sticking point is that the agreed ratio values Britvic at 1.7 times the value of Barr, with its shareholders set to own 63 per cent of the new firm, but this does not match the much larger gap between the respective operating profits of the two firms.

Negotiations between the pair have been protracted, with the Takeover panel twice extending the deadline for the pair to announce a firm merger proposal.

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