Costa Coffee attracts takeover interest from backer of China’s Luckin

CENTURIUM Capital, the private equity backer of fast-growing Chinese chain Luckin Coffee, is considering a bid for UK cafe operator Costa Coffee, people with knowledge of the matter said. 

The investment firm has been evaluating whether to make an offer for Costa Coffee, which is being sold by Coca-Cola, the people said. The exact structure of any proposal hasn’t been finalized, and it’s unclear whether Centurium would potentially be bidding itself or through Luckin. 

Luckin has grown rapidly in recent years to challenge Starbucks in the world’s second-largest economy. Deliberations are at an early stage and there’s no certainty they will proceed with a formal bid, the people said. 

Any proposal from Luckin or its main backer would face competition from rival buyout firms and strategic bidders that have also been studying the company, the people said, asking not to be identified because the information is private.

Some suitors have been discussing potential offers valuing Costa Coffee at around £1 billion (S$1.7 billion), some of the people said.

Representatives for Centurium, Luckin, Costa Coffee and Coca-Cola didn’t immediately respond to requests for comment. BLOOMBERG