Coca-Cola (KO) will meet private equity firm TDR Capital this weekend as part of one last attempt to salvage its proposed sale of Costa Coffee, which is at risk of falling apart, The Financial Times reported on Saturday.
During a meeting in New York earlier this week, the beverage giant selected TDR, which owns the U.K.’s Asda supermarket chain, as its preferred bidder for Costa, people familiar with the matter said.
However, one person said that the price the company is seeking has become a major sticking point, while another added that TDR is eyeing Costa’s UK and international operations, excluding its Chinese business.
A decision on whether to abandon the sales process is expected next week, according to the people. They added that Coke (KO) is looking to retain a minority stake in Costa as part of a potential deal, and the company could seek to adjust the stake in its favor to win over the bidder.
Amid competition from the likes of independent coffee chains and rising costs for coffee beans, wages, and other major inputs, Costa has struggled financially.
Coke (KO) is proposing to sell Costa, the UK’s largest and the world’s second-largest coffeehouse chain, for £2B ($2.7B), having paid £3.9B for its acquisition in 2018 from Premier Inn owner Whitbread, the FT previously reported.
Prior bidders Apollo Global Management (APO) and KKR (KKR) have dropped out of the buyout race over the past few months.