Coca-Cola Amatil Limited

So-called 'independent expert' Grant Samuel & Associates has declared Coca-Cola Amatil's bid for water supplier Neverfail Springwater neither fair nor reasonable. The expert has valued Neverfail between $2.49 and $2.89. We're always weary of valuations involving such cent-perfect preciseness. We prefer to see numbers that end with a zero. Regardless, this development increases the risk that Amatil will raise its bid. At the same time, Amatil has acquired the still water business Peats Ridge Springs for a price estimated to be around $10m. The deal is peanuts compared with the $280m tilt at Neverfail, but looks suspiciously like it was undertaken to send a message that Amatil doesn't need Neverfail. Either way, these developments don't change our opinion of this business. The stock is down a touch since 128/May 03 (Sell - $5.50) and our recommendation is unchanged. SELL.