Merrydown gives up independence as it signs WKD £37m deal

Merrydown, the Sussex cider maker behind the Shloer fizzy fruit drinks brand, is to end nearly 60 years of independence after agreeing to a £37m sale to SHS, a rival drinks and food business.

Merrydown, the Sussex cider maker behind the Shloer fizzy fruit drinks brand, is to end nearly 60 years of independence after agreeing to a £37m sale to SHS, a rival drinks and food business.

SHS, which makes the WKD alcopop among other food and drink brands, has offered 170p per share in cash for Merrydown. This represents a 78 per cent premium to the average price of Merrydown shares over the past six months, and a 65 per cent premium to Merrydown's share price in November, when the company announced it was in bid talks.

Nigel Freer, the chief executive of Merrydown, said the business had been courted by a number of suitors after being brought back from the brink of collapse in the late 1990s. In 1998, 52 years after it was founded and five years after floating on the stock market, Merrydown had over-expanded and let costs get out of control to the extent that it was in breach of its banking covenants and was facing bankruptcy.

"The company owed £9m to the banks and was basically bust," Mr Freer said. "But we reinvested in the brands, putting the emphasis on the Shloer business, and outsourced all our manufacturing. We went from having 160 staff to just 14. That means each person makes more than £1m in turnover."

Mr Freer said: "With our slimmed-down business and strong brands we were very attractive to buyers. SHS came in with the best offer," he said.

SHS, based in Newtownabbey in Northern Ireland, owns the Caledonian Clear water range and markets Douwe Egberts coffee, Tropicana fruit juice and Cobra beer. It already owns an 11 per cent stake in Merrydown.

The management of Merrydown will cash in about £3.2m from the takeover, the largest share going to John Jackson, a non-executive director, who stands to gain £1.7m from his shareholding. Mr Freer will make about £239,888 from the takeover and Andy Nash, the chairman, will make £895,940.

Chris Carr, the managing director of Merrydown's cider business, is the only executive who will stay with the company. He will bank £52,657 from the sale.