Thursday 22 February 2018

US activist investor cuts stake in Bulmers-maker C&C

Orange Capital has cut stake in Bulmers-maker to below 3pc. Photo: PA
Orange Capital has cut stake in Bulmers-maker to below 3pc. Photo: PA

Paul O'Donoghue

US activist investor Orange Capital has cut its stake in Irish drinks company C&C to below 3pc.

According to regulatory filings the New York-based firm reduced its stake from 5.2pc to less than 3pc via a transaction handled by Morgan Stanley on December 3.

Based on a share price of €3.68 on December 3, the shares would have been worth about €26m at the time of the sale. Orange Capital amassed a near 5pc stake in the company by October, becoming one of its largest shareholders, when it went public with a series of criticisms of C&C management.

The size of Orange's stake has varied over the last number of months.

The New York-based investor called on C&C to sell its US operations, cut back in England, and focus resources on its core Scottish and Irish markets.

C&C has since announced a €100m share buyback programme and a distribution deal in the US with Pabst which includes an option for the sale of its American arm.

C&C, known in Ireland for its Bulmers brand, entered the US market three years ago with the purchase of Vermont Hard Cider Company for €235m.

It has struggled with distribution challenges and strong competition from rival brewers.

C&C wrote down the value of its North American business by €150m in May.

Several analysts, including Davy Stockbrokers, have estimated that C&C's US arm is currently worth about €150m. C&C valued the assets at €143.5m at the end of February. It was also reported earlier this year that C&C held discussions with Carlsberg regarding a bid for its UK operations, although C&C has not commented on any talks.

Orange had not responded to a request for comment at the time of publication. Another activist investor has also recently taken a large stake in C&C. Nassif Sawiris, the youngest son of one of Egypt's richest families, and US investment group Southeastern Asset Management have together amassed a 6.7pc stake in C&C, over the last few months.

The partners are now C&C's fourth biggest shareholder, after Franklin Templeton, Fidelity Investments and Wellington Management.

Irish Independent

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