KKR makes surprise move to buy Costa Coffee - report

(Sharecast News) - US investment firm KKR has reportedly made a surprise move to buy coffee chain Costa Coffee. According to Sky News, KKR is among a small number of parties in talks with The Coca-Cola Company and its advisers at investment bank Lazard about a deal.

KKR's involvement in the process is unexpected because it had appeared to drop its interest in a potential bid in late August, soon after news of the auction was revealed by Sky News.

Sky said further details of KKR's offer were unclear, although one source said its interest remained fluid, and it was possible that it could still decide against a binding offer or choose to team up with another party.

It joins rival bidders including Bain Capital, the part-owner of bakery chain Gail's and TDR Capital, whose portfolio includes Asda.

Sources told Sky that management presentations with potential bidders were due to get underway this week.

Coca-Cola intends to retain ownership of Costa's ready-to-drink portfolio, which is also sold through other retailers.

Further bids for the business were understood to be due shortly, Sky said.

One insider suggested the value placed on Costa could be as low as £1.5bn, well under half the £3.9bn paid by Coca-Cola in 2021. Sky said it was unclear whether Coca-Cola would be prepared to offload the business at that price.

Costa trades from more than 2,000 stores in the UK and well over 3,000 globally.