Analysis - Beam Inc now at 50% risk of takeover
Bourbon brands such as Jim Beam are seeing rising demand
Beam Inc now has a one in two chance of being taken over by a bigger rival looking to benefit from a Bourbon boom, according to an analyst.
CLSA's Caroline Levy previously said the company had a 35% chance of being bought out. But yesterday's first-half results, which showed rising demand for brown spirits, makes the owner of Bourbon brands Jim Beam and Maker's Mark a more attractive target, Levy argued today (9 August).
“With growing consumer thirst for brown spirits, we think Beam is a highly attractive takeover candidate for a larger spirits player that lacks a strong Bourbon or Tequila presence,” Levy said.
In June, investment group Exane BNP Paribas said Beam will become an easier acquisition target from next month because of potential tax breaks, with Pernod the likely front-runner as a buyer.
Levy today also said she expects Beam's Skinnygirl brand, which posted a surprising 23% sales drop in H1, will bounce back in the second half of the year.
Yesterday, Beam's CEO Matt Shattock blamed bad weather for the sales fall and said new innovations in the brand's wine portfolio will help it return to growth.
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