WSD has learned Breakthru Beverage Group has made a "substantial" offer to acquire New York's Empire Merchants and Empire Merchants North.
"Our investment in New York would provide tremendous value to suppliers as they consolidate among fewer partners and look for multi-state sales and marketing synergies," reads an internal memo from Breakthru brass Rocky Wirtz, Charlie Merinoff, Danny Wirtz and Greg Baird.
"It makes sense for us, and our suppliers, as we believe it would for Empire as well. A considerable amount of time, research and diligence has been invested in making this substantial offer, and we hope to receive a positive response."
Recall, Empire Merchants is co-owned by the Merinoff/Drucker family and the Magliocco family. So Breakthru co-chairman Charlie Merinoff has a stake in Empire Merchants, but Breakthru itself does not. In September Empire Merchants filed federal fraud charges against Charlie and Breakthru chief Greg Baird, alleging they, among others, defrauded Empire through their involvement in a smuggling scheme that illegally shipped alcohol from Maryland to New York.
This was the same scheme Republic National Distributing Company (RNDC) was accused of running by the federal government. Empire claimed Charlie and Greg "directed and participated in the Maryland bootlegging scheme for pecuniary gain" and to "coerce the other Empire principals to cede control over Empire as an independent operation by combining it completely with the larger 'Charmer-Sunbelt Group.'"
But then RNDC was cleared of charges in late October throwing a wrench into Empire's argument [see WSD 10-31-2016]. Now the ball is once again in Empire's court. We'll have more as the story develops.
UPDATE: EMPIRE SAYS IT'S NOT FOR SALE
Earlier today we reported Breakthru Beverage had made an offer to acquire Empire Merchants and Empire Merchants North [see WSD 11-11-2016]. But it looks like Empire is playing hardball.
WSD received a response from Empire attorney Randy Mastro, who says Empire isn't for sale, and the "bogus bid" announcement is "an outrageous publicity stunt." He continued: "Such diversionary tactics cannot obscure the serious RICO and fraud charges Breakthru's Maryland affiliate is now facing in Empire Merchants' pending New York civil lawsuit. Meanwhile, Empire Merchants intends to continue to be the best distributor of wine and spirits in New York and, indeed, the entire country."
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