Swedish Govt. May Keep Stake in V&S
The Swedish government is considering keeping a stake in Vin & Sprit, according to business daily Dagens Industri. Sources told the Swedish publication that local consortiums Investor and EQT suggested the government keep a stake in V&S, or get the option to buy back a stake later, to help sweeten their bid. Apparently, the government is listening.
Swedish newspapers reported earlier this week that the government prefers Investor and EQT to foreign companies, such as Fortune, Bacardi and Pernod. Keeping V&S in Sweden would save thousands of jobs and keep locals happy, since Absolut is something of a national symbol. But is that enough for the government? Any group other then Fortune would have to pay hefty exit sums to get V&S out of the Maxxium joint-venture and Future j-v with Fortune in the U.S., not to mention the estimated $7 billion for V&S.
FORTUNE. Fortune chairman Norm Wesley said in August that private equity companies with a three- to five-year horizon for investments and aggressive return expectations would be more tempted to "flip" the company rather than secure its longer-term interests. In the current credit environment, he said, private equities would have a harder time financing a deal.
Furthermore, he assured the Swedes that Fortune has “a strong balance sheet” and that “there is no risk of some type of embarrassment because we can't complete.”
PERNOD. Pernod has also said it is “very interested” in acquiring V&S and is prepared to purchase either the global distribution rights to Stolichnaya or V&S. The French company said it would be happy to have either one.
During a conference call in September, Patrick Ricard said “the one I prefer is the one I buy” in regards to Stoli and Absolut. Good answer.
“There are pros and cons from both brands in terms of size, penetration you name it,” he pointed out. “When we acquired Stoli, Absolut was not up for grabs at the time and we’re very happy to distribute Stoli. Tomorrow we might want to stop the negotiations for Stoli but as of yet Absolut is not up for sale, it’s almost of for sale, but not quite. We will know in October...we will know when we know, what can I say?”
THE ONE WITH DEEPER POCKETS. Reports last week suggested the Swedish government might delay the sale of Vin & Sprit due to market turmoil. Swedish Financial Markets Minister Mats Odell confirmed on Swedish radio that the indicative bids were due last week, and that the government may delay the auction if the bids are too low.
"Once we have seen the end of that process we have the ability to put on the brake if necessary, if we feel the price is too low. If that is the case, we wait for a better time," Odell told the radio station.
Odell said in a press briefing last month that price is not the only factor in determining which company wins the golden egg. It’s important to the Swedish government that V&S is sold as one entity and that production remains in Sweden.
"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," Odell 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," he continued.
Both Fortune and Pernod have said they intend to acquire V&S as a whole.
WSD BRIEFS:
IDAHO LAWMAKERS voted to end a ban on Election Day sales of distilled spirits in liquor stores, bars and restaurants this week. Presently, liquor by the drink is available on Election Day only after the polls are closed.
CALLING ALL TRUTH SQUADERS. We want to know what you’re thinking. It only takes a few minutes to fill out our Truth Squad survey, and allows us to understand the issues you’re facing in the industry. Help us help you. All answers are kept anonymous. Click here to take the survey: http://tiny.cc/nnda6. Thanks again to everyone who has participated.
Until tomorrow, Megan
“Confusion is always the most honest response.”
-Marty Indik
--------- Sell Day Calendar ----------
Today's Sell Day: 22
Sell days this month: 22
Sell days this month last year: 22
This month ends on a: Thur
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
Swedish newspapers reported earlier this week that the government prefers Investor and EQT to foreign companies, such as Fortune, Bacardi and Pernod. Keeping V&S in Sweden would save thousands of jobs and keep locals happy, since Absolut is something of a national symbol. But is that enough for the government? Any group other then Fortune would have to pay hefty exit sums to get V&S out of the Maxxium joint-venture and Future j-v with Fortune in the U.S., not to mention the estimated $7 billion for V&S.
FORTUNE. Fortune chairman Norm Wesley said in August that private equity companies with a three- to five-year horizon for investments and aggressive return expectations would be more tempted to "flip" the company rather than secure its longer-term interests. In the current credit environment, he said, private equities would have a harder time financing a deal.
Furthermore, he assured the Swedes that Fortune has “a strong balance sheet” and that “there is no risk of some type of embarrassment because we can't complete.”
PERNOD. Pernod has also said it is “very interested” in acquiring V&S and is prepared to purchase either the global distribution rights to Stolichnaya or V&S. The French company said it would be happy to have either one.
During a conference call in September, Patrick Ricard said “the one I prefer is the one I buy” in regards to Stoli and Absolut. Good answer.
“There are pros and cons from both brands in terms of size, penetration you name it,” he pointed out. “When we acquired Stoli, Absolut was not up for grabs at the time and we’re very happy to distribute Stoli. Tomorrow we might want to stop the negotiations for Stoli but as of yet Absolut is not up for sale, it’s almost of for sale, but not quite. We will know in October...we will know when we know, what can I say?”
THE ONE WITH DEEPER POCKETS. Reports last week suggested the Swedish government might delay the sale of Vin & Sprit due to market turmoil. Swedish Financial Markets Minister Mats Odell confirmed on Swedish radio that the indicative bids were due last week, and that the government may delay the auction if the bids are too low.
"Once we have seen the end of that process we have the ability to put on the brake if necessary, if we feel the price is too low. If that is the case, we wait for a better time," Odell told the radio station.
Odell said in a press briefing last month that price is not the only factor in determining which company wins the golden egg. It’s important to the Swedish government that V&S is sold as one entity and that production remains in Sweden.
"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," Odell 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," he continued.
Both Fortune and Pernod have said they intend to acquire V&S as a whole.
WSD BRIEFS:
IDAHO LAWMAKERS voted to end a ban on Election Day sales of distilled spirits in liquor stores, bars and restaurants this week. Presently, liquor by the drink is available on Election Day only after the polls are closed.
CALLING ALL TRUTH SQUADERS. We want to know what you’re thinking. It only takes a few minutes to fill out our Truth Squad survey, and allows us to understand the issues you’re facing in the industry. Help us help you. All answers are kept anonymous. Click here to take the survey: http://tiny.cc/nnda6. Thanks again to everyone who has participated.
Until tomorrow, Megan
“Confusion is always the most honest response.”
-Marty Indik
--------- Sell Day Calendar ----------
Today's Sell Day: 22
Sell days this month: 22
Sell days this month last year: 22
This month ends on a: Thur
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
posted at 1:29 PM
<< Home