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News
Breaking: C&C and AB InBev to acquire Matthew Clark and Bibendum
British and Irish drinks producer and distributor C&C Group and brewing giant AB InBev have announced a joint plan to acquire Matthew Clark, Bibendum and other subsidiaries from the ailing Conviviality.
In a statement released this morning (4 April), C&C Group, the maker of Magners Cider, announced it was in, “advanced discussions to acquire the entire issued share capital of Matthew Clark (Holdings) Limited and Bibendum PLB (Topco) Limited and their subsidiary businesses Catalyst, Peppermint, Elastic and Walker & Wodehouse (together ‘Matthew Clark Bibendum’).”
The news is “conditional” on administrators being appointed at Conviviality which is apparently, “expected later today”.
The statement continued: “Consideration for the shares will be a nominal sum, and C&C will provide sufficient funds to support the on-going working capital and other cash requirements of the business. In addition, AB InBev will provide additional financial support to the transaction. C&C’s investment will be funded from existing C&C facilities.”
Stephen Glancey, C&C CEO, commented: “We know the Matthew Clark and Bibendum businesses very well. They are great businesses with unparalleled on-trade market access, a wide range of supplier relationships and supported by a knowledgeable and loyal employee base.
“The last few weeks have been challenging for employees, customers and suppliers alike. We hope today’s announcement can put an end to this period of disruption and uncertainty.
“We look-forward to working with our new colleagues and other stakeholders to bring stability and restore the group’s position as one of the leading and most respected drinks suppliers to the UK hospitality sector.”
The incredible reversal in Conviviality’s fortunes has brought back memories within the trade of other recent administrations. Conviviality issued its first profit warning on 8 March in which it declared that a “material error” in its financial forecasts had meant that its profit would be £5.2 million less than expected.
This was followed by an update on 14 March in which it added that it was facing a £30 million tax bill and had suspended trading in its shares. CEO Diana Hunter stepped down from the board on 19 March, her departure reportedly a pre-requisite for investors to support an equity fundraising attempt.
On 21 March, it announced it would be attempting to raise £125m to pay off debts and continue trading, but on 28 March, Conviviality reported that it had failed to reach this equity target.
It suggested parts of the business would have to be sold off, and on 29 March, filed notice of its intention to appoint administrators within 10 business days “unless circumstances change”.
Furthermore, according to a report this week in The Times, investors in Conviviality are considering legal action against the drinks company’s board after claims that they were misled over the health of the wholesaler’s finances.
According to the paper, a particular bone of contention is Conviviality’s decision to raise £30 million to fund its acquisition of 127 Central Convenience stores in December 2017. It placed 8,000,000 new ordinary shares on the market at a price of 375 pence to raise the amount.
It is claimed that investors are questioning when exactly Conviviality’s board became aware of its financial problems.
Looking positive and I am not surprised there is clearly considerable interest in the wholesale business that was in good shape till Conviviality got their hands on it. A word of caution though; C & C bought the Shepton Cider Mill a few years ago and promptly closed it. I hope they have no such similar plans for this potential acquisition. It will be good for the staff, suppliers and customers to have an end to this debillitating wait for an outcome.
I dont think this is a good news not only for the two businesses involved, but also for the whole wine industry in the UK, im confident both business are being acquired for their portfolio clients and will eventually disappear. It maybe a good news for all other wine importers though
£100M to the banks for assets that cost £280M two or so years ago – Bargain Booze indeed for C&C, deal of the year I think!
I can’t see even C&C being able effectively to absorb the client base of MC Bibendum without maintaining the bulk of the infrastructure built up over the years. On balance this looks like a pretty good solution. I can think of many worse.