A PROPOSED £1.4 billion merger between the owner of Irn-Bru and the maker of Robinsons was facing uncertainty yesterday after a key investor reportedly hit out at the terms of the deal.
Britvic, whose brands include Robinsons and Tango, has been in talks with AG Barr, the maker of Irn-Bru, to create a soft drinks powerhouse.
Harris Associates, Britvic’s eighth-biggest shareholder with 3.4 per cent, has criticised the “poorly negotiated” share ratio under the terms of the deal, it emerged over the weekend.
AG Barr approached its bigger competitor in September after Britvic’s summer was hit by poor weather conditions and a costly recall of its Fruit Shoot product. Britvic shareholders would take 63 per cent of the newly-formed group under the proposed terms being discussed, while AG Barr investors would get 37 per cent.
But analysts have said the deal values Britvic at only 1.7 times AG Barr, when its operating profits and revenues are several times higher.
David Herro, chief investment officer for international equities at Harris, said: “The share ratio was poorly negotiated in our view, and it has not been properly explained as to how the companies came up with that ratio.”
The two firms have twice extended the deadline by which a formal announcement must be made.