Coca-Cola has abandoned its plans to sell Costa Coffee following a series of unsuccessful bids from private equity firms.

The Financial Times has reported that Coca-Cola ended its talks with remaining potential buyers for the UK coffee chain in December, after a number of bids failed to meet its expectations.

Firms in the latest round of negotiations included TDR Capital, which owns Asda, as well as Bain Capital’s special situations fund, which owns PizzaExpress and bakery chain Gail’s, according to people familiar with the matter.

Coca-Cola has owned Costa since 2018, when it bought the chain from Premier Inn owner Whitbread in a deal valued at £3.9bn.

However, Costa, which has over 2,700 branches across the UK and Ireland, has since struggled with rising costs as well as competition on the UK high street. The FT reported that Coca-Cola has been seeking £2bn in a deal for Costa, roughly half what the US soft drinks giant paid eight years ago.

Head of markets at AJ Bell, Dan Coatsworth, commented: “Higher staffing costs and a spike in raw material prices have put pressure on Costa. At the same time, competition has heated up, and consumers have become wary about spending money on casual items like a coffee.

“It always felt like Costa was low down the priority list for Coca-Cola, left to go cold like an undrunk cappuccino. It will now have to give the brand more love if it is to stand any chance of getting a more reasonable takeover offer.”

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