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Material Coca-Cola Amatil bid bump not likely: Citi

As a group of fund managers dig in to fight for Coca-Cola Amatil’s future, Citi analysts reckon it may be hard to get Coca-Cola European Partners to bid against itself.

While Citi said forming a consensus view on valuation was not easy given wider market conditions, it was sticking to its “fair, not full” assessment of the $12.75 a share bid price.

Coca-Cola Amatil shares were trading at $12.70 on Wednesday.  Supplied

“While there are arguments on both sides around valuation for Amatil, we see a material change in the bid price as unlikely. Particularly given the stance of The Coca-Cola Company,” Citi analysts told clients on Wednesday morning.

“However, it is possible at least 17.3% of minority shareholders do make an approval difficult. Perhaps a dividend sweetener will help.”

The comments come after Coca-Cola Amatil institutional investors including Setanta Asset Management, Martin Currie, Antares Capital and Pendal Group expressed their concerns about the bid. 

At the heart of the debate is what multiple Coca-Cola Amatil shares should trade at given low interest rates globally, and how quickly its earnings can return to normal levels.

Coca-Cola Amatil announced the $12.75 a share bid late last month and entered into a binding scheme of arrangement with Coca-Cola European Partners last week. The suitor has also agreed terms with Coca-Cola Amatil’s biggest investor and stakeholder, Atlanta’s The Coca-Cola Company, over its 30.8 per cent stake in the Australian bottler.

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