Activist investor calls for C&C to be sold

Activist investor Engine Capital has amassed a stake in drinks maker C&C, according to people with knowledge of the matter.

The hedge fund owns just under 5 per cent of C&C, which counts Bulmers cider in Ireland and Magners in the UK among its brands. Engine is said to believe the company is undervalued and is pushing for C&C’s board to initiate a strategic review process aimed at a sale, the people said, asking not to be identified discussing confidential information.

In the eyes of Engine, C&C could be an attractive target for either industry players or private equity firms, the people said.

[ C&C plunges after chief executive quits amid accounting errors ]

A spokesman for C&C declined to comment, as did a spokesperson for Engine.

Shares in FTSE 250-traded C&C slumped as much as 13 per cent earlier this month – the most in more than a year – after the beverage maker announced a €150 million impairment charge mainly related to the Magners brand and the departure of chief executive Patrick McMahon due to previously disclosed accounting adjustments. Chairman Ralph Findlay has assumed the role of interim CEO while the company searches for its fourth permanent chief in as many years.

The stock, which is down about 53 per cent since cancelling its Euronext Dublin listing in 2019, closed June 21 in London at 159 pence, giving it a market value of about £615 million (€726 million).

[ C&C plan to draw out CEO search may lure bids – but sale now would be a cop-out ]

Engine believes C&C, which trades at about 7 times its normalised earnings before interest, taxes, amortisation and depreciation, is disconnected from the strategic value of its assets and reflects a discount to private-market transaction multiples, according to the people. The Irish company also owns Italian sparkling-wine maker Ferrari Trento and Scottish brewer Tennent’s.

Last week, Britvic said it rejected a £3.1 billion unsolicited takeover offer from Carlsberg, which in turn said it was weighing its options following several unsuccessful proposals to the owner of the J2O soft-drinks brand. – Bloomberg