Cobra Beer put up for sale

The Indian entrepreneur Lord Bilimoria has decided to put Cobra, the beer business he founded 18 years ago, up for sale for an estimated GBP 200 million after sales talks with Diageo had collapsed a few months ago.

According to a report in the Sunday Times on 23 November 2008, Lord Bilimoria has asked investment bank NM Rothschild to find a new investor in the business. Cobra Beer in the UK is famous for supplying its beer to most of the curry houses in Britain.

The decision to sell comes just two months after Cobra raised GBP 15 million of fresh capital. Investors, including Bilimoria, provided the funding after the failure of talks to sell a stake to Diageo, the world’s biggest spirits producer.

It is understood that Rothschild will contact potential buyers with a strong presence in the UK, such as Carlsberg, Heineken, InBev and Molson Coors.

International brewing concerns such as United Breweries of India, where Cobra has a growing presence, are also likely to be contacted, as are private-equity firms.

Lord Bilimoria is said to be open-minded about selling a stake in the business or accepting a full takeover. He is keen to secure investment to take Cobra to the next stage of its development.

Although Cobra has yet to make a profit, it remains one of the UK’s fastest-growing beer brands in a market that is in overall decline. At retail, it has sales of GBP 177.6 million, it was reported. The brand has grown by 28 percent in the last year, according to AC Nielsen.

When it comes to market value, the brewer is estimated to be worth around GBP 200 million (EUR 238 million).

Cobra’s largest shareholder is Bilimoria, who owns about two-thirds of the shares. The remaining stock is held by hedge funds, business-angel investors and the company’s own employees.