ATLANTA (dpa-AFX) - Coca-Cola's proposed sale of Costa Coffee is at risk of falling apart, with the soft drinks giant holding last-ditch talks with private equity firm TDR Capital this weekend in an effort to salvage the deal, according to the Financial Times.
TDR, the owner of Asda, was chosen earlier this week as Coke's preferred bidder following a board meeting in New York. However, negotiations with Coke and its advisers at Lazard have reportedly stumbled over disagreements on price.
A decision on whether to shelve the sale process altogether is expected next week. The deal currently under discussion would see Coca-Cola retain a minority stake in Costa, with the size of that stake potentially adjusted in Coke's favour to secure an agreement.
Coca-Cola has been seeking around 2 billion pounds for Costa. The company originally acquired the coffee chain from Premier Inn owner Whitbread in 2018 for 3.9 billion pounds. Since then, Costa has struggled to compete against independent operators and mass-market rivals such as Greggs.
The report noted that TDR is aiming to purchase Costa's UK and international operations, excluding its business in China. Other bidders in the auction included Bain Capital's special situations division, which owns Gail's and PizzaExpress, as well as Centurium Capital, the private equity owner of China's Luckin Coffee chain.
Meanwhile, Apollo and KKR, two major private capital firms, have dropped out of the process in recent months.
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