Constellation launches hostile Vincor bid
wine firm Vincor, but its intended prey says it is looking for
other suitors that are willing to pay a 'fair' price.
US branded wine group Constellation said it had started a cash takeover bid for Vincor, valuing it at C$31 per share (US$26, €21.6), or $1.2bn in all.
The move shows Constellation's growing frustration that Vincor has not only rejected its advances, but appears to have actively sought another buyer at a better price.
"If Vincor has provided information to any other parties, we are entitled to the same information as any other bidder," said Constellation chair Richard Sands.
"Our offer provides substantial value to Vincor shareholders at a level well beyond what we believe Vincor could achieve on its own in the increasingly competitive global wine industry."
Vincor, meanwhile, has repeated that Constellation's offer "grossly undervalues" the group's growth prospects.
"We commenced a process to explore all possible alternatives to create shareholder value and we intend to see that process through to completion," said Mark Hilson, chair of Vincor's special committee, adding Constellation could join if offered a better price.
Constellation Aggression
Drinks industry cynics claim Constellation has used acquisitions to cover weaknesses in organic growth. The group's net sales only grew three per cent in the second quarter if newly bought Mondavi and Ruffino wine brands are excluded from the figures.
The criticism led chairman Sands to launch a vehement defence of Constellation's strategy in front of US analysts, asserting that the firm did not need to buy other businesses to strengthen its own.
Sands also told the analysts that Vincor was not a must-have acquisition for Constellation.
Yet, he said in a statement a few days before that "this initiative is a high priority for us, and we are committed to making this combination a reality". He added that "we would be willing to offer a higher price".
Branded wine has shown good promise for the big drinks firms recently and Constellation may be extra keen to expand after losing out on Allied Domecq to Pernod Ricard.
Constellation announced earlier this year that it was planning to launch Robert Mondavi further outside of its US stronghold.
