WELL that put the fizz back into Britvic. For the 86 year-old soft drinks producer, the arrival of a bid from Carlsberg, the Danish brewer, has provided a welcome tonic for a lacklustre share price.

After rejecting the second of two offers - pitched at £12.50-a-share - Britvic's board resorted to conventional takeover language, declaring that it "significantly undervalued" the business.

There are plenty of reasons to think this is far from a hostile rejection, though. One leading shareholder described the latest offer as "a credible bid" while backing the board's decision to reject it.

The approval of Pepsico, the American consumer goods giant with which Britvic has a bottling contract that comprises almost half of its business, is a huge tonic for Carlsberg, which also has a number of Pepsi bottling contracts.

In addition, the Danish company is also said to have several bottling relationships with PepsiCo's bitter rival, the Coca- Cola Company, but even if these were ultimately to be lost or not renewed, it is unlikely to offset the more than £100m in synergies analysts expect Carlsberg to generate from a deal.

Nor should the 8 per cent fall in Carlsberg's stock price on the morning of confirmation of the approaches be interpreted as a serious blow to its ambitions. The company is 30 per centowned by its eponymous Foundation, which also controls 76 per cent of its voting rights, so its independent shareholders carry less influence than expected.

One Britvic shareholder tells me that an offer of just over 1300p should be enough to lever its board into opening formal talks, Excuse the pun, but it would be a major surprise now if Carlsberg bottled it.

(c) 2024 City A.M., source Newspaper