The Coca-Cola Company (NYSE:KO) has initiated discussions with a handful of potential bidders, including private equity firms, in an attempt to sell Costa, the largest high street coffee chain in Britain, Sky News reported on Saturday, citing sources.
The Atlanta-based beverage giant has already engaged the investment bank Lazard to assess interest from buyers and evaluate strategic options for the business it acquired in 2018 for £3.9B.
The indicative offers are expected to arrive in early autumn, though according to a source, the company could also decide against the divestment.
Another source suggested that Costa, which operates over 2,000 locations in the U.K. and has a market presence in countries such as India, could draw a price tag of roughly £2B in a potential sale.
Analysts said this weekend that the transaction could lead to a multibillion-pound loss for Coca-Cola (NYSE:KO), which acquired Costa from Whitbread (OTCPK:WTBCF) (OTCPK:WTBDY), the U.K.-listed operator of the Premier Inn hotel chain.
The plans for the sale come at a time when Costa’s sales are under pressure. Its annual revenue, which reached £1.22B in 2023 with ~9% YoY growth, was well below the £1.3B revenue recorded in 2018, according to accounts filed at Companies House.