Coca-Cola's HK$19.65 billion bid for China Huiyuan Juice Group has again been making headlines as the deal, announced almost six months ago, still has not secured government approval, while Huiyuan's falling share price is turning off some board members at the United States drinks giant. Shares in Huiyuan, which soared 164.3 per cent to HK$10.94 on the first trading day after the announcement of Coke's lucrative offer price of HK$12.20, have been trading at HK$8 to HK$9.40 since mid-February. The larger gap between the offer and trading prices show investors have become more worried about the chances of the deal going through, market watchers say. The takeover, which is still under review for compliance with a newly drafted anti-monopoly law, is a litmus test for the mainland's openness to foreign purchases. Under the agreement, all conditions have to be fulfilled by March 23, including government approval. 'Normally, the share price of an acquisition target in the ending phrase is close to the offer price,' said Adam Tam, an assistant portfolio manager at Pacific Sun. 'So the current share price shows investor fear that the mainland government may not approve the deal. Trading in this stock is not active. Investors are taking a wait-and-see strategy, awaiting a breakthrough.' Linus Yip, a strategist at First Shanghai Securities, said the share price had not fallen far enough to arouse serious concerns. 'The recent drop means investors are less optimistic, not necessarily pessimistic,' Mr Yip said. Huiyuan's falling share price has sparked speculation that Coca-Cola, the world's largest beverage maker, would lower the offer price. Huiyuan chairman Zhu Xinli last Friday said Coca-Cola's board supported the deal, although there was internal opposition from some of Coca-Cola's board members. 'In light of the financial crisis, I asked Coke if its interest in the deal would change, and the firm said it would not,' Mr Zhu said. 'But there are rising voices within [Coke's] board against the deal.' Coca-Cola spokesman Kenth Kaerhoeg said the firm was legally bound by agreement, which was announced on September 3. 'We remain confident in the future of Huiyuan's juice business. Huiyuan is a successful juice business in China and is highly complementary to Coca-Cola's China business,' Mr Kaerhoeg said. He also said the company was focusing on the regulatory approval process, although he added it was inappropriate to speculate when the government would finalise the approval process. Lin Zheying, the vice-director of the Department of Foreign Investment Administration at the commerce ministry, last month said Coca-Cola's bid could meet hurdles because of the excessive media coverage, Huiyuan's well-regarded brand and the deal's potential impact on the mainland's juice industry. However, he declined to comment on the deal's chances of winning government approval. The deal, if successful, would create the biggest juice maker in the mainland's highly fragmented but competitive fruit and vegetable-juice market. The two are the mainland's top two juice makers, with a combined 19.4 per cent market share by sales, Euromonitor data shows. Many observers and investors took Mr Lin's comment as a negative sign, but Wang Zhile, a director of the ministry's Research Centre for Transnational Corporations, said it was Mr Lin's personal opinion. 'I support the deal because China needs to learn how to make acquisition and merger deals,' Mr Wang said. 'This is a business decision and the current economic downturn makes the offer price more lucrative.' The takeover by a foreign company for a well-known homegrown brand had triggered a public outcry in September.