The Coca-Cola Amatil Ltd (ASX: CCL) share price is up 0.4% in early afternoon trading today. That puts shares up 1.4% since 26 October, when Coca-Cola European Partners (NYSE: CCEP) made its $9.3 billion takeover offer, valuing the shares at $12.75.
The S&P/ASX 200 Index (ASX: XJO) is up 7.2% in that same period. And it’s this resurgence in the wider market that has some of the Amatil’s larger shareholders demanding more. At least 10% more.
We’ll look at their rationale below. But first…
What does Coca-Cola Amatil do?
Coca-Cola Amatil is the authorised bottler and distributor of Coca-Cola Co‘s (NYSE: KO) beverages in Australia and 5 other Asia Pacific regions. Amatil provides a range of popular beverages including Coke, Sprite, Fanta, Kirks, Mount Franklin, Powerade, and Mother. The company also has a portfolio of alcoholic beverages, comprising a mix of company-owned and partner brands across beer, cider and spirits.
Coca-Cola Amatil has access to around 270 million potential consumers through more than 630,000 active customers.
How can these fundies send Coca-Cola Amatil’s share price 10% higher?
As the Australian Financial Review reports:
Four Amatil shareholders – Dublin-based Setanta Asset Management, Martin Currie Australia, Antares Capital and Pendal Group – have said CCEP’s offer is opportunistic and the price undervalued the business.
Together the 4 fund managers hold some 9–10% of Amatil’s shares. A formidable voting block that could derail the current offer when it comes to a vote in March. Some of the fundies believe the offer should value Amatil for at least $14 per share, 10% more than the current deal on the table.
According to one hedge fund manager (quoted by the AFR):
It would have been very hard to do this prior to COVID-19 and trying to do it next year when the world opens back up again would be extremely difficult. Markets could be higher [in March] than where they are today, which would certainly justify a higher bid.
If the past months have taught investors anything, it’s that the global economic outlook can change almost overnight. With that in mind, a lot could happen between now and March.
In the meantime, the Coca-Cola Amatil share price will be one to keep an eye on.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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