Report: Barclays to Acquire Lehman Brothers
The Wall Street Journal is reporting that that the UK’s Barclays has reached an agreement to purchase the U.S. investment bank and capital-markets businesses of Lehman Brothers for about $2 billion.
“The deal is to be put before a New York bankruptcy court judge for approval at 5 p.m. Lehman's creditors are to meet at 6 p.m. An official announcement isn't expected until Wednesday morning,” said WSJ.
Barclays is buying a “stripped-clean” version of Lehman's North American business, which will include the people, franchise, brand name, technology and clients but will not include the risky trades and liabilities that had hurt Lehman in the markets before its Chapter 11 filing. The acquisition will include all of Lehman's investment banking and capital markets businesses in the U.S. and Canada, including banking, commodities, swaps and prime brokerage. In addition, Barclays wants to keep many of Lehman's employees and businesses in Asia.
BACKGROUND. This comes as welcome news. After Lehman Brothers filed for bankruptcy yesterday in the U.S., Wall Street was sent into a tailspin. $60 billion losses from bad real estate bets and the credit market’s collapse, along with failure to find a buyer for its business forced the company to file chapter 11. The filing came shortly after midnight Monday, after Bank of America and Barclays reportedly pulled out of negotiations to acquire Lehman.
Bank of America also said this week it would buy Merrill Lynch in a $50 billion deal, just six months after the near collapse and government rescue of Bear Stearns.
The Dow Jones industrial average (INDU) lost 500 points, or 4.4%, according to early tallies. It was the biggest one-day point decline for the Dow since Sept. 17, 2001, when the market reopened for trading after having been closed in the aftermath of 9/11 terrorist attacks.
Lehman has acted as either a broker or adviser to several drinks groups, including Diageo, SPI and Carlsberg.
WALGREENS OUTBIDS CVS IN RACE FOR LONGS DRUG STORES
Walgreens launched a bidding war against CVS this week for Longs Drug Stores Corporation. Longs already accepted CVS’s price of $71.50 per share in cash, which was equivalent to about $2.7 billion. However, last Friday Walgreens offered $75 per share for about $2.8 billion, also in cash. Either deal would include the assumption of about $200 million in debt.
In a letter to Long’s board of directors, Walgreen ceo Jeffrey Rein said he preferred to negotiate with Long’s directly but was also prepared to take the offer directly to the company's shareholders. He also mentioned in the letter that Walgreens had expressed an interest in acquiring Longs earlier for $70 a share but never received due diligence materials from the company.
Longs’ largest shareholder, Pershing Square Capital Management, said it opposes the deal with CVS and had identified four other potential buyers for the drug store chain. Pershing owns 3 million shares of Longs and previously said that CVS’s bid undervalued Longs’ real estate holdings.
Meanwhile, CVS ceo Tom Ryan said the company is not raising its bid and thinks “we are paying a full and fair price.”
"Our offer represents a full and fair price for Longs shares, and we stand firm on our price," Tom Ryan, president and ceo of CVS Caremark, said in a statement. "Furthermore, the CVS Caremark offer has cleared all regulatory hurdles and provides certainty of completion to Longs shareholders."
In a press release Saturday, Longs said it recommends its shareholders accept the offer by CVS:
“Longs cautioned that no assurances can be given that the expression of interest from Walgreens will result in a transaction with Longs, at the price set forth in the expression of interest or otherwise. Longs' Board of Directors continues to recommend to its stockholders that they accept the tender offer by CVS Caremark and tender their shares of Longs in that tender offer.”
TEQUILA STILL MAKES SOME CONSUMERS SQUIRM
A new study by Agavero and Ipsos Public Affairs claims Americans still have a negative view of Tequila after surveying 1,200 men and women spirit drinkers. 38% said that they've had a bad experience when drinking tequila and nearly 10% said they don't drink tequila anymore because of the unpleasant incident. Moreover, only 7% of spirit drinkers felt tequila was a sophisticated or sipping spirit.
When asked how they most often drank tequila, 51% said they exclusively drink tequila in margaritas, only 10% drink a mixed cocktail with tequila and 4% sip tequila straight with lime. In addition, 18% says they most often drink tequila by doing shots. Approximately 16% of all spirit drinkers surveyed said that they make an 'I'm never drinking tequila again' face when they merely hear the word tequila.
Only 12% of all spirit drinkers polled said tequila was their favorite drink. In addition, only 4% of tequila drinkers felt that tequila is a drink that meets their sophisticated palate.
However, 82% said they would be willing to try tequila again if offered. When choosing a tequila, 72% of tequila drinkers said a smooth taste is their deciding factor.
Agavero tequila is imported and marketed in the U.S. by Crillon Importers.
WINE INDUSTRY SALARIES SEE NEW GROWTH
The worsening economy has not hurt overall salaries in the wine industry, reports Winebusiness.com. In a survey, the publication found that salaries have risen 4.7%, compared to 4.1% in 2007. The majority of salaries in the wine industry slightly outpace growth seen in the national average across all industries, which is about 3.8%, according to Western Management Group (WMG), a Los Gatos, California-based research firm that has conducted this survey since 1991.
Results of the 2008 Wine Business Monthly Wine Industry Compensation Survey Report reveal that 80.5% of all wine industry jobs showed an increase in annual base pay since 2007, up from a 64.2% jump last year. Wine industry jobs showed an average increase in annual base pay of 11.1% since the 2004 report while total compensation increased 12.1% from 2004 to 2008.
WHITE ROCK MAKES MANAGEMENT CHANGES
The company announced several promotions this week, which include Bill Dabbelt, Carlos Carreras, Trish Brungo and Mike Boultinghouse.
Dabbelt has been promoted from vp of sales & marketing to president but will continue to work closely with ceo Paul Coulombe and the rest of the sales team.
Carreras has been promoted from eastern division manager to vp of sales & national sales manager. Brungo has been appointed national control states sales manager and will report directly to Carreras.
Lastly, central division manager, Mike Boultinghouse, has been the given additional territory of the Southwest Region, which enlarges his division to 14 states.
“I am very excited about White Rock’s growth prospects for the foreseeable future and believe that the sales force, both new additions and existing, are among the best in the industry and will be leading the company’s growth,” said Coulombe.
DRINKS AMERICAS PROPOSES OLIFANT VODKA PURCHASE
Drinks Americas has executed a letter of intent to purchase 90% of Olifant Vodka for $1.4 million, which will be paid over four years. A 10% interest will be retained by Jack McKenzie, the president of Olifant USA. Olifant Vodka hails from Holland and currently produces an annual volume of about $1.2 million, or 32,000 cases. Its price “is well below” Drink America’s other vodka, Trump Super Premium Vodka.
McKenzie will also join Drinks Americas in a senior executive role, said ceo Patrick Kenney. A final decision will be hammered out over the next 30 days while due diligence is being completed. The companies are currently expecting that the proposed transaction will close prior to the end of the year.
BACARDI ADDS BRANDS TO Y&R ADVERTISING
The Bacardi Group has awarded the Y&R advertising agency two additional brand assignments for Bacardi Flavors and Bacardi Gold Rum. These new brands come on top of the global agency of record assignment for Bacardi Superior rum, which Y&R won in 2005. Bacardi did not reveal which other agencies it considered for the business.
In the U.S. last year, Bacardi spent $6 million in major measured media on its Flavors line and less than $1 million on its Gold Rum line, according to Nielsen. Domestic major media spending on Superior Rum totaled $12 million last year.
WSWA “ENCOURAGED” BY WE DON’T SERVE TEENS
The Wine & Spirits Wholesalers of America said they are “encouraged” by the progression of the “We Don’t Serve Teens” campaign. Members of WSWA have distributed more than 100,000 point-of-sale campaign materials to retailers.
Recent reports from the National Highway Traffic Safety Administration (NHTSA) assessed that 32 states had decreases in alcohol-impaired fatalities in 2007 from 2006, and alcohol-impaired driving fatalities, which decreased 3.7%, from 13,491 to 12,998.
The U.S. Substance Abuse and Mental Health Services Administration’s (SAMHSA) Underage Alcohol Use report found that lifetime alcohol consumption rates among 12 to 20 year olds have decreased from 56.2% in 2002 to 52.9% in 2007. And past year consumption declined significantly among 12-14 year olds and 15-17 year olds, 8% and 7% respectively.
“Wholesalers acknowledge our crucial role within the three-tier system to help ensure that alcohol is distributed and consumed responsibly and legally. We’re pleased to see the progress and influence of this campaign and remain committed to this worthwhile partnership,” said WSWA president and ceo Craig Wolf.
Discus, American Beverage Licensees (ABL), NABCA, and the Beer Institute along with the WSWA forged an alliance to support the Federal Trade Commission and the implementation of the public service campaign in 2006.
CENTER FOR ALCOHOL POLICY SHOWS CONSUMERS LIKE 3-TIER
The NBWA's 501c organization, the Center For Alcohol Policy, conducted a survey of adults showing that a full 70% of respondents say they prefer state-based alcohol regulation over federal regulation. The survey also showed that 89% of people believe lawmakers should regulate alcohol over judges, and 86% believe alcohol should not be sold online. That's important as Amazon.com prepares to sell wine through their website.
NEW TASTING ROOM OPENS IN SAN FRANCISCO
Eight northern California wineries are opening a tasting room at the Press Club in San Francisco. Wineries pouring for consumers at the Press Club include: Chateau Montelena Winery (Napa Valley), Fritz Winery (Dry Creek Valley), Hanna Winery & Vineyards (Sonoma County), Landmark Vineyards (Sonoma Valley), Miner Family Vineyards (Oakville
Mount Eden Vineyards), Santa Cruz Mountains Pahlmeyer, (Napa Valley/Sonoma Coast) and Saintsbury (Carneros).
WSD BRIEFS:
DIAGEO CHIEF PAUL WALSH has reportedly seen a $1 million decline in his annual income after suffering a cut in bonuses, reports The Herald. Walsh took home a total package of 5.059 million pounds, the company's annual report published yesterday revealed, compared to 6.3 million pounds last year.
LA MENU LABELING. While California continues to grapple with a state mandated menu labeling, the LA City Council voted last week to draft its own requirement that chain restaurants disclose nutrition information on menus and menu boards. The council said they would halt their push for local legislation if a labeling requirement already passed by the California Legislature is signed into law by Gov. Arnold Schwarzenegger. The state measure, SB 1420, is also favored by the California Restaurant Association.
MARTHA WASHINGTON’S COLONIAL RUM, a limited edition colonial-style spirit distilled and aged at Historic Mount Vernon, was hand-bottled yesterday on the grounds of George Washington’s Distillery. The bottles of Martha Washington’s Colonial Rum will be auctioned at a September 24 “Spirit of Mount Vernon” gala event sponsored by the Distilled Spirits Council and the Wine & Spirits Wholesalers of America to benefit Mount Vernon’s education programs.
MUMM NAPA has completed a new packaging design for its Napa Valley sparkling wines, which coincides with the introduction of a new Brut Rosé this fall.
Until tomorrow, Megan
“People who have what they want are fond of telling people who haven't what they want that they really don't want it.”
Ogden Nash
--------- Sell Day Calendar ----------
Today’s Sell Day: 12
Sell days this month: 22
Sell days this month last year: 20
This month ends on a: Tues.
This month last year ended on a: Fri.
YTD sell days Over/Under: -1
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.
“The deal is to be put before a New York bankruptcy court judge for approval at 5 p.m. Lehman's creditors are to meet at 6 p.m. An official announcement isn't expected until Wednesday morning,” said WSJ.
Barclays is buying a “stripped-clean” version of Lehman's North American business, which will include the people, franchise, brand name, technology and clients but will not include the risky trades and liabilities that had hurt Lehman in the markets before its Chapter 11 filing. The acquisition will include all of Lehman's investment banking and capital markets businesses in the U.S. and Canada, including banking, commodities, swaps and prime brokerage. In addition, Barclays wants to keep many of Lehman's employees and businesses in Asia.
BACKGROUND. This comes as welcome news. After Lehman Brothers filed for bankruptcy yesterday in the U.S., Wall Street was sent into a tailspin. $60 billion losses from bad real estate bets and the credit market’s collapse, along with failure to find a buyer for its business forced the company to file chapter 11. The filing came shortly after midnight Monday, after Bank of America and Barclays reportedly pulled out of negotiations to acquire Lehman.
Bank of America also said this week it would buy Merrill Lynch in a $50 billion deal, just six months after the near collapse and government rescue of Bear Stearns.
The Dow Jones industrial average (INDU) lost 500 points, or 4.4%, according to early tallies. It was the biggest one-day point decline for the Dow since Sept. 17, 2001, when the market reopened for trading after having been closed in the aftermath of 9/11 terrorist attacks.
Lehman has acted as either a broker or adviser to several drinks groups, including Diageo, SPI and Carlsberg.
WALGREENS OUTBIDS CVS IN RACE FOR LONGS DRUG STORES
Walgreens launched a bidding war against CVS this week for Longs Drug Stores Corporation. Longs already accepted CVS’s price of $71.50 per share in cash, which was equivalent to about $2.7 billion. However, last Friday Walgreens offered $75 per share for about $2.8 billion, also in cash. Either deal would include the assumption of about $200 million in debt.
In a letter to Long’s board of directors, Walgreen ceo Jeffrey Rein said he preferred to negotiate with Long’s directly but was also prepared to take the offer directly to the company's shareholders. He also mentioned in the letter that Walgreens had expressed an interest in acquiring Longs earlier for $70 a share but never received due diligence materials from the company.
Longs’ largest shareholder, Pershing Square Capital Management, said it opposes the deal with CVS and had identified four other potential buyers for the drug store chain. Pershing owns 3 million shares of Longs and previously said that CVS’s bid undervalued Longs’ real estate holdings.
Meanwhile, CVS ceo Tom Ryan said the company is not raising its bid and thinks “we are paying a full and fair price.”
"Our offer represents a full and fair price for Longs shares, and we stand firm on our price," Tom Ryan, president and ceo of CVS Caremark, said in a statement. "Furthermore, the CVS Caremark offer has cleared all regulatory hurdles and provides certainty of completion to Longs shareholders."
In a press release Saturday, Longs said it recommends its shareholders accept the offer by CVS:
“Longs cautioned that no assurances can be given that the expression of interest from Walgreens will result in a transaction with Longs, at the price set forth in the expression of interest or otherwise. Longs' Board of Directors continues to recommend to its stockholders that they accept the tender offer by CVS Caremark and tender their shares of Longs in that tender offer.”
TEQUILA STILL MAKES SOME CONSUMERS SQUIRM
A new study by Agavero and Ipsos Public Affairs claims Americans still have a negative view of Tequila after surveying 1,200 men and women spirit drinkers. 38% said that they've had a bad experience when drinking tequila and nearly 10% said they don't drink tequila anymore because of the unpleasant incident. Moreover, only 7% of spirit drinkers felt tequila was a sophisticated or sipping spirit.
When asked how they most often drank tequila, 51% said they exclusively drink tequila in margaritas, only 10% drink a mixed cocktail with tequila and 4% sip tequila straight with lime. In addition, 18% says they most often drink tequila by doing shots. Approximately 16% of all spirit drinkers surveyed said that they make an 'I'm never drinking tequila again' face when they merely hear the word tequila.
Only 12% of all spirit drinkers polled said tequila was their favorite drink. In addition, only 4% of tequila drinkers felt that tequila is a drink that meets their sophisticated palate.
However, 82% said they would be willing to try tequila again if offered. When choosing a tequila, 72% of tequila drinkers said a smooth taste is their deciding factor.
Agavero tequila is imported and marketed in the U.S. by Crillon Importers.
WINE INDUSTRY SALARIES SEE NEW GROWTH
The worsening economy has not hurt overall salaries in the wine industry, reports Winebusiness.com. In a survey, the publication found that salaries have risen 4.7%, compared to 4.1% in 2007. The majority of salaries in the wine industry slightly outpace growth seen in the national average across all industries, which is about 3.8%, according to Western Management Group (WMG), a Los Gatos, California-based research firm that has conducted this survey since 1991.
Results of the 2008 Wine Business Monthly Wine Industry Compensation Survey Report reveal that 80.5% of all wine industry jobs showed an increase in annual base pay since 2007, up from a 64.2% jump last year. Wine industry jobs showed an average increase in annual base pay of 11.1% since the 2004 report while total compensation increased 12.1% from 2004 to 2008.
WHITE ROCK MAKES MANAGEMENT CHANGES
The company announced several promotions this week, which include Bill Dabbelt, Carlos Carreras, Trish Brungo and Mike Boultinghouse.
Dabbelt has been promoted from vp of sales & marketing to president but will continue to work closely with ceo Paul Coulombe and the rest of the sales team.
Carreras has been promoted from eastern division manager to vp of sales & national sales manager. Brungo has been appointed national control states sales manager and will report directly to Carreras.
Lastly, central division manager, Mike Boultinghouse, has been the given additional territory of the Southwest Region, which enlarges his division to 14 states.
“I am very excited about White Rock’s growth prospects for the foreseeable future and believe that the sales force, both new additions and existing, are among the best in the industry and will be leading the company’s growth,” said Coulombe.
DRINKS AMERICAS PROPOSES OLIFANT VODKA PURCHASE
Drinks Americas has executed a letter of intent to purchase 90% of Olifant Vodka for $1.4 million, which will be paid over four years. A 10% interest will be retained by Jack McKenzie, the president of Olifant USA. Olifant Vodka hails from Holland and currently produces an annual volume of about $1.2 million, or 32,000 cases. Its price “is well below” Drink America’s other vodka, Trump Super Premium Vodka.
McKenzie will also join Drinks Americas in a senior executive role, said ceo Patrick Kenney. A final decision will be hammered out over the next 30 days while due diligence is being completed. The companies are currently expecting that the proposed transaction will close prior to the end of the year.
BACARDI ADDS BRANDS TO Y&R ADVERTISING
The Bacardi Group has awarded the Y&R advertising agency two additional brand assignments for Bacardi Flavors and Bacardi Gold Rum. These new brands come on top of the global agency of record assignment for Bacardi Superior rum, which Y&R won in 2005. Bacardi did not reveal which other agencies it considered for the business.
In the U.S. last year, Bacardi spent $6 million in major measured media on its Flavors line and less than $1 million on its Gold Rum line, according to Nielsen. Domestic major media spending on Superior Rum totaled $12 million last year.
WSWA “ENCOURAGED” BY WE DON’T SERVE TEENS
The Wine & Spirits Wholesalers of America said they are “encouraged” by the progression of the “We Don’t Serve Teens” campaign. Members of WSWA have distributed more than 100,000 point-of-sale campaign materials to retailers.
Recent reports from the National Highway Traffic Safety Administration (NHTSA) assessed that 32 states had decreases in alcohol-impaired fatalities in 2007 from 2006, and alcohol-impaired driving fatalities, which decreased 3.7%, from 13,491 to 12,998.
The U.S. Substance Abuse and Mental Health Services Administration’s (SAMHSA) Underage Alcohol Use report found that lifetime alcohol consumption rates among 12 to 20 year olds have decreased from 56.2% in 2002 to 52.9% in 2007. And past year consumption declined significantly among 12-14 year olds and 15-17 year olds, 8% and 7% respectively.
“Wholesalers acknowledge our crucial role within the three-tier system to help ensure that alcohol is distributed and consumed responsibly and legally. We’re pleased to see the progress and influence of this campaign and remain committed to this worthwhile partnership,” said WSWA president and ceo Craig Wolf.
Discus, American Beverage Licensees (ABL), NABCA, and the Beer Institute along with the WSWA forged an alliance to support the Federal Trade Commission and the implementation of the public service campaign in 2006.
CENTER FOR ALCOHOL POLICY SHOWS CONSUMERS LIKE 3-TIER
The NBWA's 501c organization, the Center For Alcohol Policy, conducted a survey of adults showing that a full 70% of respondents say they prefer state-based alcohol regulation over federal regulation. The survey also showed that 89% of people believe lawmakers should regulate alcohol over judges, and 86% believe alcohol should not be sold online. That's important as Amazon.com prepares to sell wine through their website.
NEW TASTING ROOM OPENS IN SAN FRANCISCO
Eight northern California wineries are opening a tasting room at the Press Club in San Francisco. Wineries pouring for consumers at the Press Club include: Chateau Montelena Winery (Napa Valley), Fritz Winery (Dry Creek Valley), Hanna Winery & Vineyards (Sonoma County), Landmark Vineyards (Sonoma Valley), Miner Family Vineyards (Oakville
Mount Eden Vineyards), Santa Cruz Mountains Pahlmeyer, (Napa Valley/Sonoma Coast) and Saintsbury (Carneros).
WSD BRIEFS:
DIAGEO CHIEF PAUL WALSH has reportedly seen a $1 million decline in his annual income after suffering a cut in bonuses, reports The Herald. Walsh took home a total package of 5.059 million pounds, the company's annual report published yesterday revealed, compared to 6.3 million pounds last year.
LA MENU LABELING. While California continues to grapple with a state mandated menu labeling, the LA City Council voted last week to draft its own requirement that chain restaurants disclose nutrition information on menus and menu boards. The council said they would halt their push for local legislation if a labeling requirement already passed by the California Legislature is signed into law by Gov. Arnold Schwarzenegger. The state measure, SB 1420, is also favored by the California Restaurant Association.
MARTHA WASHINGTON’S COLONIAL RUM, a limited edition colonial-style spirit distilled and aged at Historic Mount Vernon, was hand-bottled yesterday on the grounds of George Washington’s Distillery. The bottles of Martha Washington’s Colonial Rum will be auctioned at a September 24 “Spirit of Mount Vernon” gala event sponsored by the Distilled Spirits Council and the Wine & Spirits Wholesalers of America to benefit Mount Vernon’s education programs.
MUMM NAPA has completed a new packaging design for its Napa Valley sparkling wines, which coincides with the introduction of a new Brut Rosé this fall.
Until tomorrow, Megan
“People who have what they want are fond of telling people who haven't what they want that they really don't want it.”
Ogden Nash
--------- Sell Day Calendar ----------
Today’s Sell Day: 12
Sell days this month: 22
Sell days this month last year: 20
This month ends on a: Tues.
This month last year ended on a: Fri.
YTD sell days Over/Under: -1
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 5:01 PM
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