Apollo holds talks with advisors over Costa sale

Investment group Apollo Global Management has reportedly held early-stage talks with advisers to Coca-Cola as it explores a sale of Costa, according to Sky News.

The private equity vehicle, which owns Wagamama’s parent company, The Restaurant Group, is said to be part of a small number of suitors that have held initial talks with advisers.

Sources told Sky that the process was still at a very early stage, with indicative bids not due for several weeks.

They added that Apollo might not decide to pursue a formal offer for the coffee chain.

KKR, another US-based private equity giant, has reportedly also spoken to Coca-Cola’s adviser, Lazard, but sources said it was unlikely to table a firm bid.

Earlier this week it was reported that Coca-Cola is working with bankers to hold exploratory talks over the sale of Costa Coffee more than six years after acquiring it.

Investment bank Lazard is understood to have been engaged by Coca-Cola and initial talks have already been held with a small number of potential bidders.

Indicative offers are said to be due in the early part of the autumn, although one source cautioned that Coca-Cola could yet decide not to proceed with a sale.

Analysts believe that any sale would lead to multibillion pound loss on the £3.9bn sum Coca-Cola agreed to pay to buy Costa from Premier Inn owner Whitbread. It is thought the high street coffee chain could fetch a sum of around £2bn.

Apollo declined to comment.