Engine Capital, an activist investor, has reportedly acquired a significant share in beverage manufacturer C&C, highlighted by informed individuals. It’s believed that Engine now controls slightly less than 5 percent of C&C, renowned for creating Bulmers cider in Ireland and Magners in the UK. It is understood that Engine asserts C&C is underpriced and is advocating for a strategic evaluation by the C&C board, with the aim being to sell the business.
In Engine’s perspective, C&C proves to be a tempting acquisition target for either industrial entities or private equity organisations. Both C&C and Engine chose not to comment on these speculations. Earlier in the month, C&C’s shares, which are traded on the FTSE 250, nosedived by nearly 13% – the largest drop in over a year – after the company revealed a €150 million impairment fee largely linked to the Magners brand, and the exit of CEO Patrick McMahon related to previously announced accounting revisions.
Chairman Ralph Findlay has temporarily taken the CEO reins while they seek their fourth permanent CEO in the same number of years. In fact, their stock has plunged about 53% since they rescinded their Euronext Dublin listing in 2019. The London closing of the stock on June 21 was 159 pence, which equates to a market capitalisation of approximately £615 million or €726 million.
Engine posits that there’s a disparity between the strategic importance of C&C’s assets and its trading which is at approximately 7 times its normalised earnings before interest, taxes, amortisation and depreciation. The company also owns Italian wine company Ferrari Trento and Scottish brewer Tennent’s. Interestingly, Carlsberg’s unsolicited takeover bid amounting to £3.1 billion was rebuffed by Britvic last week. The J2O soft-drink brand’s owner has seen multiple unsuccessful offers from Carlsberg, which is considering its next move.