C&C shareholders to meet on September 25 to vote on proposed Tennent’s acquisition

C&C has set September 25 as the date for the EGM, at which the group’s shareholders will vote on its proposed acquisition of Tennent’s Lager and the other assets within the Irish, Northern Irish and Scottish division of the Anheuser Busch-InBev brewing giant.

The Dublin-headquartered owner of the Bulmers/Magners cider brands reached agreement to buy the subsidiary interests, last week for £180 million (€205m). As well as the Tennent’s brand, these include the Glasgow-based Wellpark Brewery and distribution rights for a number of brands across the three markets – including Stella Artois and Beck’s.

Presuming shareholder approval is forthcoming – initial shareholder reaction at C&C’s annual general meeting in Dublin, last Friday, seemed broadly positive – the transaction is set to be formally completed by the end of this month, or in early October at the latest. This month’s EGM will be held at the Radisson Hotel in Stillorgan, Dublin, at 10am on September 25.

C&C yesterday published the formal circular on the Tennent’s deal, which said that the “target business” generated revenue of £291.4m last year; an operating profit of £7.8m and EBITDA (earnings before interest, tax, depreciation and amortisation) of £20.9m; adding that volumes had already slipped by 7% in the first half of this year.

“The company reported that despite a 7% fall in volumes so far in 2009, “there has been a substantial improvement in EBITDA”.

While not quantifying how much this was, it noted the main contributory factors to this margin improvement were price increases, improved gross margins and reduced marketing costs. Last week, we upgraded our forecasts for C&C in anticipation of the acquisition being approved – by 2.7% for 2010, 12.3% for 2011 and 17% for 2012,” Goodbody Stockbrokers analyst, Liam Igoe said.

C&C’s management said, last week, that the acquisition would be beneficial on many levels (not least in boosting group revenue) and evolves the group’s strategy “to become a successful manager of alcoholic drinks brands in international markets”.


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