'Czech Coke' Kofola plans Prague listing

By bne IntelliNews September 17, 2015

bne IntelliNews -


Czech soft drinks producer Kofola plans to list its shares on the Prague Stock Exchange in the last quarter of 2015 or early next year, the company said on September 16.

The move demonstrates the resurgance of the Communist-era brand, and will be a boost to the Prague Stock Market, whose last IPO, brewer Pivovary Lobkowicz, was back in 2014. Lokowicz has recently announced plans to delist.

As part of plans to move its headquarters back from Poland to the Czech Republic and restructure the group, the company has acquired a shell Czech company Kofola CeskoSlovensko that will become the new holding company and majority owner.

It will conduct a squeeze out of minority shareholders in Kofola and then delist the company’s shares from the regulated market of the Warsaw Stock Exchange. Currently 43% of the shares are owned by Poland-based private equity firm Enterprise Investors, and 51% are held by the family of Chief Executive Janis Samaras.

As a next step, Kofola CeskoSlovenensko will apply for listing on the Prague bourse. At a later stage, the company might again list on the Warsaw Stock Exchange.

“The IPO may consist of both issue of new and sale of existing shares in Kofola CeskoSlovensko. The IPO may consist of a public offering in the Czech Republic and Poland and of private placement in these and other countries,” Kofola said in a statement. The listing, subject to favourable market conditions, is planned for the fourth quarter of 2015 or first three months of 2016.

That new structure is designed to help the local drinks company better compete against global giants such as Coca-Cola and PepsiCo in Central Europe.

Kofola, the Czech cola, is a classic example of how communist-era brands are making a comeback in Central and Eastern Europe. Kofola now produces more than in its early 1970s heyday and is challenging Coca-Cola for the top spot in the Czech and Slovak soft drinks markets. The company has expanded into Slovakia, Poland and Hungary, with the aim of becoming one of the biggest soft drinks companies in the region.

The Kofola brand was developed in Czechoslovakia in the early 1960s as a challenge to the appeal of American Coke. It was one of the few brands created in the period because Czechoslovak communism was far more state directed than that in Hungary or Poland.

Kofola now ranks as the second biggest soft drinks maker in the Czech Republic after Karlovarske Mineralni Vody (KMV). It has about 2,300 employees, eight production plants and distribution networks in the Czech Republic, Slovakia, Poland, Slovenia and Russia.

Earlier this year, Kofola bought Slovenia’s largest mineral water producer Radenska for €51.8mn. In June it announced the acquisition of a 40% stake in Slovak bottled water company Water Holding. In Slovakia, Kofola already owned mineral water company Rajec.

Kofola is not the only Czech beverage company active on M&A market in recent months. KVM bought Hungarian bottled water producer Kekkuti Asvanyviz from Nestle in March. Those acquisitions are part of the ongoing consolidation of the mineral water sector in Central Europe, as local brands struggle to remain competitive against global giants like Coca-Cola and PepsiCo, analysts say.

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