The Coca-Cola Company has received fewer proposals than expected for Costa Coffee, banking insiders have revealed.
According to Sky News, Coca-Cola and its advisers had marked last week as the deadline for indicative offers for the coffee giant, after it was first revealed that Coca-Cola was mulling a sale of Costa last month.
Apollo Global Management, the owner of Wagamama’s parent company The Restaurant Group, had previously been named as one of the potential bidders for Costa. However, City sources said today (22 September) that the business did not move ahead with an offer.
TDR Capital, which became the majority owner of Asda last year with a 67.5% shareholding in the supermarket chain, has been named as one of a small number of private equity firms circling Costa. US-based private equity investor KKR is also understood to have held initial talks with Lazard, Coca-Cola’s adviser.
A buyer would be eyeing nearly 2,800 Costa shops in the UK and Ireland.
It is understood Coca-Cola plans to retain the brand’s ready-to-drink coffee range, sold in supermarkets and convenience stores, despite sales of the range falling by £4.7m on volumes down 23.2% amid distribution losses last year [NIQ 52 w/e 28 December 2024].
In 2024, Coca-Cola also reported a 3% decline in coffee sales, primarily due to the performance of Costa in the UK.
During the fmcg giant’s second quarter earnings call in July, CEO James Quincey said Costa had “not quite delivered” and was “not where we wanted it to be from an investment hypothesis point of view”.
Coca-Cola acquired Costa in a £3.9bn deal with Premier Inn owner Whitbread in 2018. Analysts have suggested Costa may now be sold for £2bn.
No comments yet