ABSOLUT BIDDING WAR, IT’S OFFICIAL
It's official folks, Absolut is on the auction block. The Swedish government today said it has begun contacting interested parties that Vin & Sprit, valued at $5-7 billion, is for sale. The sale is expected to be completed in 2008, said Swedish Financial Markets Minister Mats Odell.
Morgan Stanley, which is advising the government, is due to send the information memorandum on V&S to selected parties in the next few weeks, according to MSNBC. Interested bidders will be asked to submit first round indicative offers towards the end of January.
Here are some of the key factors. While the Swedish government confirmed the auction process was chosen to maximize value, according to WSJ, price is not the only factor in determining which company wins the golden egg. Furthermore, Odell said in a press briefing that V&S will be sold as one entity and not broken up. The Swedish company also owns Plymouth gin and Cruzan rum,
"Our analysis shows that the best option is to sell the company as one entity," he said as quoted in the WSJ.
Lastly, Odell said he thought Absolut production would remain in Sweden but that it was not a requirement for the sale.
"It will be the one who pays the highest price and the one who after a full assessment shows that it offers the best (deal) for the Swedish households," he told reporters, according to Reuters.
"I hope it can happen fast and in an effective way but it's not the specific time that is the most important but that we get the best possible price," Odell continued.
As you’ll recall, Pernod Ricard, Diageo, Fortune Brands, Bacardi, as well as Swedish investment company Investor AB and Swedish private-equity firm EQT have all shown interest in acquiring V&S.
So far, it looks like Pernod is the only one that’s talking. According to the Dow Jones newswires, a Pernod spokesman said, “We expressed our interest (for Vin & Sprits' Absolut) and we remain interested.”
When asked whether Pernod would be interested in buying the whole company or just Absolut, the Pernod spokesman noted the company “always said it was interested to acquire Vin & Sprits as a whole.”
With JP Morgan as its advisor, Pernod, much like everyone else, awaits further details of the auction. The French company currently does not have an international vodka brand and is considered financially secure enough to make the acquisition.
However, Fortune recently sold its wine biz to Constellation to make room for Vin & Sprit and remains a strong contender. As you’ll recall, Fortune already has multiple distribution deals with V&S, including Maxxium and Future Brands (its j-v with V&S in the U.S.). Also, V&S holds a 10% stake in Beam. Credit Suisse will serve as Fortune’s advisor.
Bacardi has reportedly hired NM Rothschold to oversee its bid for Absolut. If Bacardi were to win the auction, it would surpass Pernod as the second largest spirits company in the world. Diageo, meanwhile, has hired UBS and Greenhill as its corporate adviser.
Let the games begin.
Morgan Stanley, which is advising the government, is due to send the information memorandum on V&S to selected parties in the next few weeks, according to MSNBC. Interested bidders will be asked to submit first round indicative offers towards the end of January.
Here are some of the key factors. While the Swedish government confirmed the auction process was chosen to maximize value, according to WSJ, price is not the only factor in determining which company wins the golden egg. Furthermore, Odell said in a press briefing that V&S will be sold as one entity and not broken up. The Swedish company also owns Plymouth gin and Cruzan rum,
"Our analysis shows that the best option is to sell the company as one entity," he said as quoted in the WSJ.
Lastly, Odell said he thought Absolut production would remain in Sweden but that it was not a requirement for the sale.
"It will be the one who pays the highest price and the one who after a full assessment shows that it offers the best (deal) for the Swedish households," he told reporters, according to Reuters.
"I hope it can happen fast and in an effective way but it's not the specific time that is the most important but that we get the best possible price," Odell continued.
As you’ll recall, Pernod Ricard, Diageo, Fortune Brands, Bacardi, as well as Swedish investment company Investor AB and Swedish private-equity firm EQT have all shown interest in acquiring V&S.
So far, it looks like Pernod is the only one that’s talking. According to the Dow Jones newswires, a Pernod spokesman said, “We expressed our interest (for Vin & Sprits' Absolut) and we remain interested.”
When asked whether Pernod would be interested in buying the whole company or just Absolut, the Pernod spokesman noted the company “always said it was interested to acquire Vin & Sprits as a whole.”
With JP Morgan as its advisor, Pernod, much like everyone else, awaits further details of the auction. The French company currently does not have an international vodka brand and is considered financially secure enough to make the acquisition.
However, Fortune recently sold its wine biz to Constellation to make room for Vin & Sprit and remains a strong contender. As you’ll recall, Fortune already has multiple distribution deals with V&S, including Maxxium and Future Brands (its j-v with V&S in the U.S.). Also, V&S holds a 10% stake in Beam. Credit Suisse will serve as Fortune’s advisor.
Bacardi has reportedly hired NM Rothschold to oversee its bid for Absolut. If Bacardi were to win the auction, it would surpass Pernod as the second largest spirits company in the world. Diageo, meanwhile, has hired UBS and Greenhill as its corporate adviser.
Let the games begin.
posted at 1:03 PM
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