What You Need to Know about the Coca-Cola Amatil Takeover (ASX:CCL)

It’s been a big start to the week for the Coca-Cola Amatil Ltd [ASX:CCL] share price, with the beverage company announcing a takeover offer and the release of Q3 2020 results.

CCL shares entered a trading halt on Friday stoking rumours about a potential takeover bid.

Today those rumours have been confirmed, which has sent the CCL share price upwards:

ASX CCL Share Price Chart 1

Source: Tradingview

At the time of writing, CCL shares are trading at $12.29 per share, up $1.54 or 14.33%.

Deal branded as ‘opportunistic’

CCL emerged from its trading halt today, announcing a proposed takeover by Coca-Cola European Partners PLC [NYSE:CCEP] of $12.75 cash per share, less any dividends paid, for independent shareholders.

But some investors may think that CCEP are treating us as if we have very short memories.

Look at the five-year graph below:

ASX Coca Cola Amatil Share Price Chart 2

Source: Tradingview

CCL shares were trading around $13 in February, before the coronavirus pandemic punished sales.

Reece Birtles, chief investment officer at Martin Currie Australia, said the offer was opportunistic.

Are they right?

According to the Australian Financial Review there are a host of other analysts that agree the offer is opportunistic and undervalues CCL.

Trading volumes in Q3 2020 have sunk 5.4% on the previous corresponding quarter, resulting in a 4.2% drop in revenue.

What we do know is that the pandemic has exacerbated the long-term decline in sales of full-sugar soft drinks and bottled water.

Meaning an acquisition by CCEP could be the ticket to protecting the share price and its dividends.

If you’re feeling a little uneasy about the future prospects of CCL’s dividend paying ability, be sure to check out our top five ASX-listed dividend stocks with a great chance of maintaining big payouts during and after the crash. Click here to download your free report.


Lachlann Tierney

For The Rum Rebellion

Lachlann Tierney is a writer for The Rum Rebellion and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. 

The Rum Rebellion