Home 171106 Refresco | the final round?
171106 Refresco | the final round?

171106 Refresco | the final round?

No. pages 15

Last 25 October, less than two and half years post its IPO on 27 March 2015, Refresco reached an agreement with the Consortium of PAI Partners S.A. ("PAI") and British Columbia Investment Management Company ("bcIMC") to be taken over for EUR 1.6bn or EUR 20.00 per share.

As a start; this wasn't exactly PAI's first attempt. Already prior to the IPO the private equity group approached Refresco. Then, it was rumored to bid EUR 1.5bn or approx. EUR 18.50 per share based on the current number of shares. Note that these figures were never confirmed. In April 2017 Refresco was approached by PAI again. The latter proposed EUR 1.4bn for 100% of Refresco's shares or approx. EUR 17.30 per share. Refresco declined the offer. Interestingly, as stated in last week's press release, it declined the offer back then because "the terms and conditions did not reflect the value creation potential stemming from the intended acquisition of Cott TB". Refresco announced the acquisition of Cott TB in July 2017, so obviously it could not refer to the preparations of this deal back in April 2017. In recent months, Refresco and the Consortium (now also including bcIMC) had various interactions, also in relation to Refresco's intended EUR 200m equity issue that was part of the financing of the EUR 1.1bn Cott TB deal. Ultimately this resulted in a EUR 19.75 per share bid on 3 October 2017. Unlike back in April, Refresco immediately confirmed PAI's interest. On 18 October the company entered into further negotiations which finally resulted in the negotiated deal at EUR 20.00 per share.

The agreed EUR 20.00 per share bid might be 16% higher than the failed April offer, but obviously only marginally (1%) higher than the EUR 19.75 offered early October. Key question, is this a fair price, as argued by Refresco's Boards? In this report (the last one?), we will provide you with our arguments.


1   EUR 20.00 per share is the highest price "ever"
2   Refresco's operational performance has been mixed
3   EV EUR 3.3bn results in 8.5x EV/EBITDA (incl. synergies), a reasonable multiple?
4   Room for an increase in the offer price?
5   Probability of a competing offer?
6   DCF estimates support our conclusions

Created Date: Tuesday November 07, 2017 13:15:24
Last Updated Date: Tuesday November 07, 2017 13:15:24
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