SOFT drinks firms AG Barr and Britvic may be considering whether to ramp up production at AG Barr’s new Milton Keynes facility as part of their merger plans, according to analysts.
The market will be keen to hear about progress on talks following the extension of the £1.4 billion deadline to the end of this month. Most analysts and fund managers still believe the deal will go through.
One analyst, ahead of Britvic’s trading update on Thursday, said: “I would expect Britvic to stonewall on how the talks are going as AG Barr did when it put out its interim results recently.
“But it makes you wonder that, while we thought the companies were a long way down the line in their negotiations, for instance in sorting out the top jobs, there might still be ticklish issues. For example, Barr has said it will go ahead with opening a new depot in Milton Keynes over 2013 and 2014.
“To give the City the deal synergy figures it wants, could the delay be because they are wondering whether capacity could switch from one or more Britvic plants to that new facility in Milton Keynes? Maybe they are thinking of closing one or more of the Britvic sites.”
Britvic’s main production plants include Beckton in east London, Widford, near Chelmsford in Essex, and Norwich.
However one fund manager, with stakes in both Irn-Bru producing Barr and Britvic, said he believes the deal will definitely go through. “I think this is just a case of Barr chief executive Roger White [who would be boss of the new entity] being meticulous,” he said.
“He is renowned as being very thorough and probably wants to dot all the i’s and cross all the t’s.”
Britvic is expected to say that sales have been badly hit over the summer because of very poor weather.
It also put out a profit warning in July after recalling faulty Robinsons Fruit Shoot bottle tops.
