Permira holds fire on £600m Britvic bid in search of agreed deal

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The private equity giant Permira yesterday denied it planned an immediate hostile bid for the soft drinks group Britvic, but refused to rule out an agreed takeover of the company.

Permira issued a statement yesterday after weekend speculation that it was ready to pounce on Britvic with a £600m offer. "Permira wishes to state that it does not intend to make an offer," the company said.

However, Permira said it reserved the right to "make or participate in an offer within the next six months ... with the agreement or recommendation of the board of Britvic; if a third party or Britvic announces an approach or an offer for Britvic; [or in the event of] the announcement by Britvic of a 'whitewash' proposal or of a reverse takeover".

Speculation over the future of the bottler of Pepsi, Robinsons and 7up has been rife for months and rumours of an imminent bid intensified last week.

However, any deal would require the approval of PepsiCo, which holds a change-of-control clause. The US company owns 5 per cent of Britvic and has a bottling and distribution agreement with the group.

Permira is thought to have built a 5 per cent stake in Britvic.

Britvic said yesterday: "The board understands its fiduciary duty to shareholders and will consider any serious offer for the company.

"At present we have had no contact from anyone regarding an offer."

The company has performed poorly since it was floated on the stock market by its major shareholders - InterContinental Hotels, Whitbread and Pernod Ricard - at the end of last year.

Britvic has been hit hard by a growing trend towards healthy fruit juices and away from sugary fizzy drinks, amid fears of an obesity epidemic in Britain. It was forced to issue two profit warnings in the spring, though sales have improved since then.

A more upbeat trading statement published on Friday sent the shares soaring above the flotation price of 230p for the first time since March when the first profit warning was issued.

Pepsi has also suffered from arch-rival Coca-Cola's launch of a new low-calorie drink, Coke Zero, backed by a massive ad campaign marketing it as a "zero sugar" drink.

Against this background, Britvic has been busy investing in new fruit-based drinks and bottled waters. Its new children's water brand, Fruit Shoot H20, has performed well since its launch in May.

Britvic's latest trading statement surprised City analysts and some upgraded their profit forecasts. It showed sales of still drinks climbed 7.5 per cent while fizzy drinks were down 5.8 per cent in the 20 weeks to September. The group benefited from a hot July and the World Cup in Germany, but admitted that it has yet to develop a presence in the fast-growing pure juice market.