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Shares in soft drinks supplier Britvic slumped 15p to 275½p today after its biggest shareholder was forced to dump almost 14% of the company, worth £80.1 million, in the market place.
UBS placed 30.2 million shares at a heavily discounted 265½p with various institutions on behalf of private equity investor Permira Advisers.
In response to the sale, Permira says: “Our strategy is to make controlled investments and, as such, we have decided to sell our passive stake in Britvic though the company has continued to perform well.”
Permira bought an initial 3% stake in Essex-based Britvic in 2006 which it rapidly expanded to 14%. It was later widely tipped to make a £600 million offer for the company, which it later denied.
Permira is said to have borrowed the money to buy the stake from UBS in the shape of a margin loan which is now coming up for renewal.
It is believed to have paid an average of 268p a share for its stake, leaving it nursing a loss on its investment, excluding dividends, of £755,000.
Britvic was floated at 230p in December 2005, with a price tag of £800 million and debts of £300 million.
The group behind such drinks as Tango and Robinsons and with the exclusive rights to produce and distribute the Pepsi and 7Up brands, was originally jointly owned by InterContinental Hotels (47.5%), Whitbread and Pernod (23.75% each), and Pepsi (5% which it continues to hold). But the shares have never really lived up to expectations.
The switch by consumers to healthier drink options forced Britivic to issue no less than three profit warnings within the space of just six months, shortly after its stock market debut. Cazenove continues to rate the shares at overweight with a 300p target.
It says recent results again demonstrated the underlying strength of the UK business. “Despite the stiff economic headwind, Britvic expanded its UK and international profit margin by 70 basis points.
Shares generally boiled over after a firm start amid growing political tension over North Korea.
The FTSE 100 index fell 6.19 to 4405.53, having briefly touched 4439.79.
This afternoon in New York shares were beating a retreat on news of a 7.1% drop in US house prices during the first quarter. The Dow Jones fell 21.1 to 8452.3.
Ten new European companies have been added to the Dow Jones Stoxx 600 index, of which eight are UK-based and should benefit from subsequent re-weightings by fund managers.
They include Enterprise Inns, up 3p at 152¼p, brewer Greene King, 31¾p higher at 443p, SIG, 3p better at 120½p, Travis Perkins, 9p dearer at 744p, Debenhams, ¼p off at 89¾p, computer software specialist Misys, 3¼p better at 159¼p, and miners Peter Hambro Mining, 10½p better at 635p, and Fresnillo, 19p cheaper at 688½p.
Speculative buying continued to drive oil services supplier John Wood Group higher. The shares added ½p to 283¾p, after touching 292p as a meagre 1.7 million shares changed hands.
The gossips say Amec, up 13½p at 665p, wants to bid. But the broking arm of Royal Bank of Scotland says such a move is unlikely.
Today was the turn of Credit Suisse to take a peek at the water companies ahead of next month's crucial dividend reporting season.
Yesterday shares in the big four underperformed the market after Bank of America Merrill Lynch warned that, while investors could draw some comfort that dividends would not be cut, several of the companies were looking expensive.
Credit Suisse has dropped its target for Pennon, 1p off at 479¼p, from 667p to 617p, but takes a more bullish view of the others raising Severn Trent, 21p better at 1160p, from underperform to neutral while lowering its target from 1319p to 1210p.
Northumbrian, up 2½p at 249p, is raised from neutral to outperform with its target trimmed from 310p to 301p along with United Utilities, 2½p better at 544½p, which is dropped from 671p to 609p.
ITV stood out with a rise of 4p at 32p on turnover of more than 27 million shares. The independent television broadcaster should do well this week on the back of tonight's exclusive rights to the European Champion's League final.
Goldman Sachs has added the shares to its Conviction Buy list. Remember! It was the Goldman-led consortium which tried bidding for ITV a few years back.
BSkyB, up 6¼p at 461½p, still holds almost 18% of ITV, but has been told to reduce its stake.
