C&C could be takeover target for drinks giant
Published 22/05/2010 | 05:00
DRINKS company C&C Group, which will report full-year results to the end of February on Tuesday, may become a takeover target, according to research published yesterday.
A note from Citigroup analyst Liz Ferguson suggested the company may be targeted by Canadian giant Molson Coors in the long term.
Ms Ferguson believes the takeover of Anheuser Busch Ireland and the divesting of its spirits business to Grants of Scotland mean the company would be a good strategic fit for Molson.
"C&C is effectively consolidating the UK assets that Molson Coors does not own, thus making it a more attractive acquisition target," she said.
This is not the first time a takeover of C&C has been mooted. Two years ago, brokers upgraded their recommendation on the company to "buy" on the back of takeover talks and a cost-cutting operation.
Ms Ferguson's note also highlighted the performance of the company over the past number of months. For the eight weeks up to March 20, sales of long alcoholic drinks (LADs) and cider dropped significantly.
LADs fell 13pc in February and 7pc in March, while cider sales were slightly better, sliding 10pc and 4pc.
Group volume was down 5pc in February and 4pc in March, but Citigroup described this as "a strong performance relative to the market".