Cantrell & Cochrane (C&C) has made no secret that it will be an eager bidder for Britvic, the British soft drinks group that is now officially up for sale. An early decision is expected and if C&C is the favoured bidder, then it could be the springboard that catapults C&C into a flotation and equity fundraising.

But Britvic will not come cheap and the likely price tag may now be in excess of £400 million sterling (€665 million), a price that would test C&C's abilities to the limit. Given C&C's level of debt as a result of the highly leveraged buy-out - €768 million at the end of last September and interest cover of just 1.7 times - it is difficult to see how C&C could make a pitch for Britvic without a major injection of equity finance.

C&C chief Tony O'Brien has already said money is always available for a good proposition, and a flotation and fundraising would not necessarily be required to fund an acquisition. That said, market sources believe it would be an extraordinary piece of financial engineering for a company with C&C's balance sheet to buy a company the size of Britvic using debt finance alone.

There is no doubt that Britvic would be an ideal fit for C&C, but with Pepsi Cola, Matthew Clark and Cadbury Schweppes all tipped as potential bidders, C&C's competition is extremely well-funded. C&C has also been mentioned as a possible bidder for the juices and mixers arm of Seagrams, which is on the block as part of the sell-off of non-core assets by Diageo and Pernod Ricard.

It is now almost two-and-ahalf years since British venture capital group BC Capital backed Mr O'Brien's eight-strong management team's £578 million buyout of C&C from Allied Domecq. BC never put a timetable on its exit from C&C but such groups tend to have a three- to five-year timescale to realise their investment.

There is no onus on C&C to do a quick deal simply to provide an exit mechanism for its venture capital backers. And there is also an argument that C&C might be better off getting its balance sheet into better shape before it considers any move on the scale of a Britvic bid.