BUSINESS NEWS: Takeover speculation for C&C

SABMiller has been linked to  C&C amid speculation that the brewer might make a takeover bid for the cider and spirit producing company.

In fact, rumours that SABMiller was a potential buyer drove C&C’s share price to its highest level in over three months.

Based on C&C’s current share price, City analysts estimate that SABMiller would have to pay 18 times C&C’s EBITDA in order to acquire the company. Yet SABMiller paid only 10.8 times EBITDA for Bavaria, its latest acquisition.

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C&C’s operating profit jumped by 66% in the first half of 2006 thanks to the growth in Magners sales. Currently, cider sales generate around 80% of C&C’s operating profit.

© db January 2007