Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<a href="https://www.smartkarma.com/entities/coca-cola-european-partners" target="_blank" data-smartkarma-citation="entities:29709:1" rel="noopener">Coca-Cola European Partners (CCEP US)</a> announced an improved best and final takeover offer of <a target="_blank">A$13.50 per share </a>(previous offer: A$12.75 per share, adjusted for 2H20 dividends paid) for 69.2% of <a href="https://www.smartkarma.com/entities/coca-cola-amatil-ltd" target="_blank" data-smartkarma-citation="entities:675:1" rel="noopener">Coca Cola Amatil (CCL AU)</a>, held by shareholders other than The Coca-Cola Company.Coca-Cola Amatil shares rose 2.1% following the announcement to A$13.41 per share, just 9.0 cents below the takeover offer price, indicating that there may be minimum investor opposition.

Coca-Cola European Partners (CCEP US) announced an improved best and final takeover offer of A$13.50 per share (previous offer: A$12.75 per share, adjusted for 2H20 dividends paid) for 69.2% of Coca Cola Amatil (CCL AU), held by shareholders other than The Coca-Cola Company.Coca-Cola Amatil shares rose 2.1% following the announcement to A$13.41 per share, just 9.0 cents below the takeover offer price, indicating that there may be minimum investor opposition.

Coca-Cola Amatil Takeover Offer Raised 5.9%, Seems Like a Done Deal

<ul>
<li>In October 2020, <a href="https://www.smartkarma.com/entities/coca-cola-amatil-ltd" target="_blank" data-smartkarma-citation="entities:675:1" rel="noopener">Coca Cola Amatil (CCL AU)</a> (CCL), one of the largest bottlers and distributors of <a href="https://www.smartkarma.com/entities/coca-cola-co-the" target="_blank" data-smartkarma-citation="entities:979:1" rel="noopener">Coca Cola Co (KO US)</a>’s range of products, announced a non-binding indicative proposal from <a href="https://www.smartkarma.com/entities/coca-cola-european-partners" target="_blank" data-smartkarma-citation="entities:29709:1" rel="noopener">Coca-Cola European Partners (CCEP US)</a> (CCEP) to acquire 69.2% of the share capital of CCL (at A$ 12.75 per share in cash, adjusted for 2H20 dividends paid), held by shareholders other than The Coca-Cola Company (KO).</li>
<li>Financial advisors to the deal are Rothschild &amp; Co, Credit Suisse and UBS.</li>
<li>The takeover offer was at a 23% premium to CCL‘s undisturbed one-week volume-weighted price. In our previous notes, we deemed that the offer price was reasonable considering CCL’s somewhat weak fundamentals.</li>
</ul><a href="https://www.smartkarma.com/insights/a-generous-offer-by-coca-cola-european-partners" target="_blank" data-smartkarma-citation="insights:44693" rel="noopener">A Generous Offer By Coca-Cola European Partners</a><a href="https://www.smartkarma.com/insights/growing-investor-opposition-to-ccep-s-take-over-offer-will-there-be-a-bump" target="_blank" data-smartkarma-citation="insights:45143" rel="noopener">Growing Investor Opposition to CCEP's Take Over Offer: Will There Be a Bump?</a><ul>
<li>However, a number of institutional investors pushed back against Coca-Cola European Partners’ takeover offer, suggesting that the takeover offer undervalues the company.</li>
<li>Yesterday, news emerged that Citigroup expects an improved takeover offer for CCL in the next 6-8 weeks.</li>
</ul>


In October 2020, Coca Cola Amatil (CCL AU) (CCL), one of the largest bottlers and distributors of Coca Cola Co (KO US)’s range of products, announced a non-binding indicative proposal from Coca-Cola European Partners (CCEP US) (CCEP) to acquire 69.2% of the share capital of CCL (at A$ 12.75 per share in cash, adjusted for 2H20 dividends paid), held by shareholders other than The Coca-Cola Company (KO).
Financial advisors to the deal are Rothschild &amp; Co, Credit Suisse and UBS.
The takeover offer was at a 23% premium to CCL‘s undisturbed one-week volume-weighted price. In our previous notes, we deemed that the offer price was reasonable considering CCL’s somewhat weak fundamentals.
A Generous Offer By Coca-Cola European PartnersGrowing Investor Opposition to CCEP's Take Over Offer: Will There Be a Bump?
However, a number of institutional investors pushed back against Coca-Cola European Partners’ takeover offer, suggesting that the takeover offer undervalues the company.
Yesterday, news emerged that Citigroup expects an improved takeover offer for CCL in the next 6-8 weeks.


Coca-Cola Amatil Takeover Offer: A Bump Forthcoming?

The takeover offer by <a href="https://www.smartkarma.com/entities/coca-cola-european-partners" target="_blank" data-smartkarma-citation="entities:29709:1" rel="noopener">Coca-Cola European Partners (CCEP US)</a> (CCEP) to acquire <a href="https://www.smartkarma.com/entities/coca-cola-amatil-ltd" target="_blank" data-smartkarma-citation="entities:675:1" rel="noopener">Coca Cola Amatil (CCL AU)</a> (CCL) at A$12.75 per share in cash, adjusted for 2H20 dividends paid, was at a 23% premium to CCL‘s undisturbed one-week volume-weighted price.We discussed this in our insight, <a href="https://www.smartkarma.com/insights/a-generous-offer-by-coca-cola-european-partners" target="_blank" rel="noopener">A Generous Offer By Coca-Cola European Partners</a> and deemed that CCEP’s offer was more than reasonable.However, it appears that at least four fund managers who collectively own about 9-10% of CCL shares consider that the offer materially undervalues the company.

The takeover offer by Coca-Cola European Partners (CCEP US) (CCEP) to acquire Coca Cola Amatil (CCL AU) (CCL) at A$12.75 per share in cash, adjusted for 2H20 dividends paid, was at a 23% premium to CCL‘s undisturbed one-week volume-weighted price.We discussed this in our insight, A Generous Offer By Coca-Cola European Partners and deemed that CCEP’s offer was more than reasonable.However, it appears that at least four fund managers who collectively own about 9-10% of CCL shares consider that the offer materially undervalues the company.

Growing Investor Opposition to CCEP's Take Over Offer: Will There Be a Bump?

Earlier this week, <a href="https://www.smartkarma.com/entities/coca-cola-amatil-ltd" target="_blank" data-smartkarma-citation="entities:675:1" rel="noopener">Coca Cola Amatil (CCL AU)</a> (CCL), one of the largest bottlers and distributors of <a href="https://www.smartkarma.com/entities/coca-cola-co-the" target="_blank" data-smartkarma-citation="entities:979:1" rel="noopener">Coca Cola Co (KO US)</a>’s range of products, announced a non-binding indicative proposal from <a href="https://www.smartkarma.com/entities/coca-cola-european-partners" target="_blank" data-smartkarma-citation="entities:29709:1" rel="noopener">Coca-Cola European Partners (CCEP US)</a> (CCEP) to acquire 69.2% of the share capital of CCL (at A$ 12.75 per share in cash, adjusted for 2H20 dividends paid), held by shareholders other than The Coca-Cola Company (KO).Upon implementation of the above proposal, CCEP will acquire 10.8% of CCL’s share capital from KO at A$9.75 per share. The remaining 20% will be acquired upon completion at A$10.75 per share.

Earlier this week, Coca Cola Amatil (CCL AU) (CCL), one of the largest bottlers and distributors of Coca Cola Co (KO US)’s range of products, announced a non-binding indicative proposal from Coca-Cola European Partners (CCEP US) (CCEP) to acquire 69.2% of the share capital of CCL (at A$ 12.75 per share in cash, adjusted for 2H20 dividends paid), held by shareholders other than The Coca-Cola Company (KO).Upon implementation of the above proposal, CCEP will acquire 10.8% of CCL’s share capital from KO at A$9.75 per share. The remaining 20% will be acquired upon completion at A$10.75 per share.

A Generous Offer By Coca-Cola European Partners

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<a href="https://www.smartkarma.com/entities/coca-cola-european-partners" target="_blank" data-smartkarma-citation="entities:29709:1" rel="noopener">Coca-Cola European Partners (CCEP US)</a> announced on 25 October that it has made a non-binding proposal to acquire <a href="https://www.smartkarma.com/entities/coca-cola-amatil-ltd" target="_blank" data-smartkarma-citation="entities:675:1" rel="noopener">Coca Cola Amatil (CCL AU)</a>.
<ul>
<li>CCL’s independent shareholders would get AUD12.75 per share, in cash.</li>
<li>CCL's shares shot up by 16.3%, while those of CCEP closed 2.7% lower.</li>
</ul>
Although the rationale for a deal is unclear to me, CCEP can afford the acquisition.
CCL was getting its fizz back: CCL shares had fallen by 3% during 2019 to $10.75 (prior to the offer announcement), but are trading above their March low of AUD7.86. I view CCL as a strong company, with a clear strategy; growth opportunities (expanding offer, overseas growth); and growing market share.
However, the current environment is likely to see a structural shift to eating at home and less casual dining at restaurants; a focus on healthier alternatives away from sugary and carbonated drinks; and a resulting decline in restaurant numbers, all of which are dilutive to CCL’s margins.
The offer price represents 22.6x Forward P/E vs. 19.2x for CCEP, thus looking a generous offer. Recommendation is LONG CCL.
<ul>
<li>Gross spread is 1.9% on a deal that is highly likely to succeed.</li>
<li>Average 3m trading volume is 2.8 million shares.</li>
</ul>

Coca-Cola European Partners (CCEP US) announced on 25 October that it has made a non-binding proposal to acquire Coca Cola Amatil (CCL AU).

CCL’s independent shareholders would get AUD12.75 per share, in cash.
CCL's shares shot up by 16.3%, while those of CCEP closed 2.7% lower.

Although the rationale for a deal is unclear to me, CCEP can afford the acquisition.
CCL was getting its fizz back: CCL shares had fallen by 3% during 2019 to $10.75 (prior to the offer announcement), but are trading above their March low of AUD7.86. I view CCL as a strong company, with a clear strategy; growth opportunities (expanding offer, overseas growth); and growing market share.
However, the current environment is likely to see a structural shift to eating at home and less casual dining at restaurants; a focus on healthier alternatives away from sugary and carbonated drinks; and a resulting decline in restaurant numbers, all of which are dilutive to CCL’s margins.
The offer price represents 22.6x Forward P/E vs. 19.2x for CCEP, thus looking a generous offer. Recommendation is LONG CCL.

Gross spread is 1.9% on a deal that is highly likely to succeed.
Average 3m trading volume is 2.8 million shares.


Coca-Cola European Partners - Coca-Cola Amatil: Non-Binding Proposal

United Kingdom

Coca-Cola Europacific Partners PLC is a beverage company. The Company markets, produces, and distributes beverages such as carbonated drinks. Coca-Cola Europacific Partners operates in Europe.

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Coca-Cola Europacific Partners (CCEP US)

Coca-Cola Amatil Takeover Offer Raised 5.9%, Seems Like a Done Deal

Coca-Cola European Partners announced an improved best and final takeover offer of A$13.50 per share (previous offer A$12.75 per share, adjusted...

Oshadhi Kumarasiri

Coca-Cola Amatil Takeover Offer: A Bump Forthcoming?

In October 2020, CCL announced a non-binding indicative proposal from CCEP to acquire 69.2% of the share capital of CCL held by shareholders other...

Oshadhi Kumarasiri

Growing Investor Opposition to CCEP's Take Over Offer: Will There Be a Bump?

The takeover offer by Coca-Cola European Partners to acquire Coca Cola Amatil at A$12.75 per share in cash, adjusted for 2H20 dividends paid, has...

Oshadhi Kumarasiri

A Generous Offer By Coca-Cola European Partners

CCL is one of the APAC region’s largest bottlers and distributors of alcoholic and non-alcoholic RTD beverages with operations in Australia, New...

Oshadhi Kumarasiri

Coca-Cola European Partners - Coca-Cola Amatil: Non-Binding Proposal

The offer price represents 22.6x Forward P/E vs. 19.2x for CCEP, thus looking a generous offer. Recommendation is LONG CCL. Gross spread is 1.9% on...

Jesus Rodriguez Aguilar

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