Allied Wooer Gets A Date

Keeping you updated with the latest in mergers and acquisitions has become something of a full time occupation in itself here on the db news desk.

Keeping you updated with the latest in mergers and acquisitions has become something of a full time occupation in itself here on the db news desk.

Last year it was Mondavi and Morrisons that kept us busy and so far this year it’s been nothing but Allied and Pernod … until Constellation reared its head that is.

As our Big Interview with the company’s president and COO, Robert Sands on page 26 indicates, the world’s largest wine company is more than keen to be in on any spirits acquisitions that might happen.

Back in March Sands told db, “We think there are a lot of synergies for us with spirits and we see the sector as good business in terms of profile from a return and investment point of view, so we would like to be in there on many of the spirits acquisitions that occur around the world. Things are somewhat in play with some of the major spirits companies and I think that bits and pieces will be shaking loose in one form or another, you know. We’d definitely like to be there when that happens.”

So it was no surprise to hear that the company was interested in Allied Domecq when Pernod Ricard tabled a bid, and no one raised an eyebrow when it was reported that Constellation was heading a consortium looking at a rival offer for the Allied business.

Thus far, however (at the time of writing at least) there has been no further news. Will Constellation table a bid or merely try to snap up some of the duplicate brands that Pernod might want to offload when its deal for Allied is complete?

The answer should not be too long in arriving either, as the latest development in the Allied saga is an official announcement from the UK’s Takeover Panel.

At the end of last month the panel gave the Constellation consortium a deadline of June 29, by which time it must decide if it will proceed with a formal counter-offer for Allied. Earlier an indicative proposal is understood to have been in cash and valued Allied at around 700p per share, or around £7.75bn. But analysts are warning that the company will struggle to fund a bid, given the tough debt market conditions (for more on which see page 126).

Constellation is said to be happy with the deadline but if it does not proceed by that time, it will have to wait six months before another offer can be made. Watch this space …