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.
