Stoli Could Sell for $3 Billion
Stolichnaya could soon become the subject of a bidding war between some of the biggest spirits companies in the world. Russian owner SPI has hired Lehman Brothers to explore options that could result in the sale of Stoli for up to $3 billion. Another option is selling the distribution rights instead of the entire brand. Possible bidders for Soli include Bacardi, Campari and Fortune Brands.
Spokesmen for SPI and the beverage companies either declined to comment or couldn't be reached, according to the Wall Street Journal.
Fortune Brands was considered the top contender for Absolut in a bidder war earlier this year, but Pernod Ricard succeeded in acquiring the Swedish vodka for over $8 billion. Industry insiders speculate that Fortune might be the top bidder for Stoli as a result. Not only does the company want a major vodka brand, but it raised a significant amount of cash after selling its wine business to Constellation in an attempt to acquire V&S.
After announcing the deal to acquire Vin & Sprit (which owns Absolut), Pernod said it would sell its international distribution rights to Soli once its deal with V&S closes in a couple of months. Pernod gained access to Stoli when it acquired Allied Domecq and currently distributes the vodka in every market outside of Russia.
Sources tell WSJ that Lehman has been working on a possible deal for Stoli for a long time but that the closing of the V&S deal could give a transaction renewed momentum.
PROBLEMS WITH STOLI. Past complications with the Russian government, however, are unlikely to dissipate. Pernod was in negotiations with SPI and the Russian government for three years to acquire the entire rights to Stolichnaya, but was unable to strike a deal. Vladimir Putin, the Russian prime minister and former president, brought legal proceedings against SPI in 2001 to try to bring Stolichnaya into state control, reports the Daily Telegraph, which broke the story yesterday.
People familiar with SPI's plans told the Telegraph that a sale process would begin within the next few weeks.
WHAT POSSIBLE BIDDERS ARE SAYING. In an interview with Just-Drinks in April, Jim Beam Brands president and ceo Tom Flocco said the following when asked if Fortune would be interested in acquiring Stoli:
“Stolichnaya is a good brand, but it is a brand that, based on what I've read, some smart people worked very hard to get out of the dual ownership structure...but if it were to become available, would we look at it? Sure.”
According to Thomson Financial news, a Campari spokeswoman said: “As regards Stolichnaya, we have seen the media reports. As you know, our sector is going through a period of change.”
“Therefore we are curious to see the developments, confirming our interest in examining new opportunities, above all in spirits.”
Campari stated on numerous occasions that it would take advantage of acquisition opportunities in the aftermath of the V&S and Pernod deal.
Some of the world’s biggest vodka brands have been sold in recent years. Recall that Sidney Frank sold Grey Goose to Bacardi for over $2 billion in 2004.
FOSTER’S FORMER CEO DEFENDS HIS DEPARTURE
Former ceo of Foster’s Group, Trevor O’Hoy, defended his resignation over the weekend. He said his departure and his actions as ceo were in the company’s best interest, reports The Age.
“I don't think any time in my career I've done anything that I did not believe was in the best interests of Foster's shareholders,” he said.
“It's clear I haven't got every decision right, but the decision I made last weekend was in the interests of Foster's shareholders.”
O’Hoy was at Foster’s for 33 years until he quit last week, taking full responsibility for the company’s troubled wine business.
He denied suggestions that he was pushed into resigning, stating: “I want you to know that I resigned. It was my choice.”
Foster’s has hired Heidrick & Struggles to search for a new ceo, which they expect to find this year. O’Hoy has agreed to stay at Foster’s to help the transition.
MORE BACKGROUND ON CONSTELLATION DEAL
It turns out that the newly formed Ascentia wine company only paid $94 million for the eight wine brands acquired from Constellation, according to an article in Wines & Vines. Ascentia owns the brands, inventory and personal property, while VinREIT bought the real estate for the remaining $115 million. VinREIT, headed by Vic Motto, said his group would have bought the land and wineries from Constellation no matter who bought the brands.
VinREIT and Ascentia have signed a long-term lease for Ascentia to farm the land and use the buildings, and at the end of the term, Ascentia could buy the property or make other arrangements. VinREIT is owned by Entertainment Property Trust and Motto's Global Wine Partners, a wine industry investment bank based in St. Helena, Calif. Motto is CEO of Global and a principal in VinREIT.
SAM’S CLUB NAMES NEW WINE DIRECTOR
Sam’s Club has named Dex McCreary the new merchandise director of wine, beer and spirits. Most recently, he was the national wine buyer for Wal-Mart, joining the company in 2007, where he lead the successful launch of Wal-Mart’s private label wine Oak Leaf. Prior to joining Wal-Mart, McCreary served as National Account Manager at Beam Wine Estates.
"We are looking forward to further advancing our wine and spirits offering for our members and growing this important category with Dex," said Greg Spragg, executive vice president of merchandising at Sam’s Club.
WSD BRIEFS:
CHATEAU MONTELENA COULD BE FOR SALE, according to Wine Spectator. Sources tell the publication that the famous Napa winery was recently put on the market and bidders have presented offers in excess of $100 million. The Barrett family is allegedly weighing those offers. When contacted by Wine Spectator, Bo Barrett, the winemaker and son of founder Jim Barrett, refused to comment.
DIAGEO IS INVESTING $18 MILLION IN ITS PLAINFIELD, ILLINOIS BOTTLING FACILITY to help support growing demand of Smirnoff. The money will go towards adding processing and storage capacity and upgrading packaging lines. The facility produces more than 12 million cases of spirit a year.
Until tomorrow, Megan
“The future is here. It's just not widely distributed yet.”
William Gibson
--------- Sell Day Calendar ----------
Today's Sell Day: 11
Sell days this month: 21
Sell days this month last year: 21
This month ends on a: Mon.
This month last year ended on a: Fri.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
Spokesmen for SPI and the beverage companies either declined to comment or couldn't be reached, according to the Wall Street Journal.
Fortune Brands was considered the top contender for Absolut in a bidder war earlier this year, but Pernod Ricard succeeded in acquiring the Swedish vodka for over $8 billion. Industry insiders speculate that Fortune might be the top bidder for Stoli as a result. Not only does the company want a major vodka brand, but it raised a significant amount of cash after selling its wine business to Constellation in an attempt to acquire V&S.
After announcing the deal to acquire Vin & Sprit (which owns Absolut), Pernod said it would sell its international distribution rights to Soli once its deal with V&S closes in a couple of months. Pernod gained access to Stoli when it acquired Allied Domecq and currently distributes the vodka in every market outside of Russia.
Sources tell WSJ that Lehman has been working on a possible deal for Stoli for a long time but that the closing of the V&S deal could give a transaction renewed momentum.
PROBLEMS WITH STOLI. Past complications with the Russian government, however, are unlikely to dissipate. Pernod was in negotiations with SPI and the Russian government for three years to acquire the entire rights to Stolichnaya, but was unable to strike a deal. Vladimir Putin, the Russian prime minister and former president, brought legal proceedings against SPI in 2001 to try to bring Stolichnaya into state control, reports the Daily Telegraph, which broke the story yesterday.
People familiar with SPI's plans told the Telegraph that a sale process would begin within the next few weeks.
WHAT POSSIBLE BIDDERS ARE SAYING. In an interview with Just-Drinks in April, Jim Beam Brands president and ceo Tom Flocco said the following when asked if Fortune would be interested in acquiring Stoli:
“Stolichnaya is a good brand, but it is a brand that, based on what I've read, some smart people worked very hard to get out of the dual ownership structure...but if it were to become available, would we look at it? Sure.”
According to Thomson Financial news, a Campari spokeswoman said: “As regards Stolichnaya, we have seen the media reports. As you know, our sector is going through a period of change.”
“Therefore we are curious to see the developments, confirming our interest in examining new opportunities, above all in spirits.”
Campari stated on numerous occasions that it would take advantage of acquisition opportunities in the aftermath of the V&S and Pernod deal.
Some of the world’s biggest vodka brands have been sold in recent years. Recall that Sidney Frank sold Grey Goose to Bacardi for over $2 billion in 2004.
FOSTER’S FORMER CEO DEFENDS HIS DEPARTURE
Former ceo of Foster’s Group, Trevor O’Hoy, defended his resignation over the weekend. He said his departure and his actions as ceo were in the company’s best interest, reports The Age.
“I don't think any time in my career I've done anything that I did not believe was in the best interests of Foster's shareholders,” he said.
“It's clear I haven't got every decision right, but the decision I made last weekend was in the interests of Foster's shareholders.”
O’Hoy was at Foster’s for 33 years until he quit last week, taking full responsibility for the company’s troubled wine business.
He denied suggestions that he was pushed into resigning, stating: “I want you to know that I resigned. It was my choice.”
Foster’s has hired Heidrick & Struggles to search for a new ceo, which they expect to find this year. O’Hoy has agreed to stay at Foster’s to help the transition.
MORE BACKGROUND ON CONSTELLATION DEAL
It turns out that the newly formed Ascentia wine company only paid $94 million for the eight wine brands acquired from Constellation, according to an article in Wines & Vines. Ascentia owns the brands, inventory and personal property, while VinREIT bought the real estate for the remaining $115 million. VinREIT, headed by Vic Motto, said his group would have bought the land and wineries from Constellation no matter who bought the brands.
VinREIT and Ascentia have signed a long-term lease for Ascentia to farm the land and use the buildings, and at the end of the term, Ascentia could buy the property or make other arrangements. VinREIT is owned by Entertainment Property Trust and Motto's Global Wine Partners, a wine industry investment bank based in St. Helena, Calif. Motto is CEO of Global and a principal in VinREIT.
SAM’S CLUB NAMES NEW WINE DIRECTOR
Sam’s Club has named Dex McCreary the new merchandise director of wine, beer and spirits. Most recently, he was the national wine buyer for Wal-Mart, joining the company in 2007, where he lead the successful launch of Wal-Mart’s private label wine Oak Leaf. Prior to joining Wal-Mart, McCreary served as National Account Manager at Beam Wine Estates.
"We are looking forward to further advancing our wine and spirits offering for our members and growing this important category with Dex," said Greg Spragg, executive vice president of merchandising at Sam’s Club.
WSD BRIEFS:
CHATEAU MONTELENA COULD BE FOR SALE, according to Wine Spectator. Sources tell the publication that the famous Napa winery was recently put on the market and bidders have presented offers in excess of $100 million. The Barrett family is allegedly weighing those offers. When contacted by Wine Spectator, Bo Barrett, the winemaker and son of founder Jim Barrett, refused to comment.
DIAGEO IS INVESTING $18 MILLION IN ITS PLAINFIELD, ILLINOIS BOTTLING FACILITY to help support growing demand of Smirnoff. The money will go towards adding processing and storage capacity and upgrading packaging lines. The facility produces more than 12 million cases of spirit a year.
Until tomorrow, Megan
“The future is here. It's just not widely distributed yet.”
William Gibson
--------- Sell Day Calendar ----------
Today's Sell Day: 11
Sell days this month: 21
Sell days this month last year: 21
This month ends on a: Mon.
This month last year ended on a: Fri.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 11:44 AM
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