Carlsberg is preparing an improved, third bid for Britvic PLC (LSE:BVIC), local reports have indicated, despite the negative share price reaction last week and scepticism from analysts.
Today the FTSE 250 drinks group's shares have hit a new all-time high of 1,214p, which is still below the 1,250p per share offer price from Friday.
Barclays said the Britvic Carlsberg deal "lacks fizz" for the Copenhagen beer behemoth.
"Whilst our analysis suggests the deal does have financial merits we are conscious of execution difficulties around integrating beer and soft drinks companies, as shown by similar deals historically," analysts at the bank said.
They think a valuation "between 1,300-1,350p would be more attractive", with the second offer of 1,250p on Friday representing 13.1 timesEBITDA multiple, "which is above recent precedent transactions".
UBS analyst Sanjeet Aujla said the positives for Carlsberg could "unlock significant synergies, particularly in the UK, where Carlsberg remains subscale", as well as diversifying its portfolio and delivering cross-selling opportunities.
"On the negative side, we note: 1) Carlsberg has no track record of significant M&A integration; 2) higher leverage means no buybacks for the foreseeable future; 3) the higher multiple Asia exposure would be diluted; and 4) Britvic is not topline growth accretive."
Carlsberg said it "will only proceed with a transaction that is strategically and financially attractive."
Barclays says the Britvic Carlsberg deal "lacks fizz" for the Copenhagen company.
"Whilst our analysis suggests the deal does have financial merits we are conscious of execution difficulties around integrating beer and soft drinks companies, as shown by similar deals historically."
They think a valuation "between 1,300-1,350p would be more attractive", with the second offer of 1,250p on Friday representing 13.1 timesEBITDA multiple, "which is above recent precedent transactions".