US/POLAND: CEDC bides time with Russian Standard
CEDC in no rush to settle down with Russian Standard
Central European Distribution Corp has said that it needs time to consider Russian Standard's offer of debt funding and assets in return for a bigger stake in the distributor.
While Central European Distribution Corp (CEDC) is reviewing the Russian vodka maker's proposal, it appears in no rush to cement a deal. It looks likely that the group will miss tomorrow's deadline, set by Russian Standard, for CEDC to commit to exclusive talks.
"The board needs time to verify the offer with great diligence and evaluate its full impact on the future of the company in the short- and long-term," a CEDC spokesperson told just-drinks today (7 February). Last week, CEDC said in a statement that a deal with Russian Standard is one of several "options" on the table, although a group spokesperson declined to be specific.
Her comments followed the publication of a letter, written by Russian Standard's owner, Roustam Tariko, which said the group is seeking to increase its existing stake in CEDC from 9.9% to 32.99% via two transactions. In return, the Russian group is prepared to offer CEDC a "backstop credit facility" and distribution rights on its namesake vodka, among other unspecified assets, said the letter, dated 1 February.
Today, CEDC said in an official response to the Russian group that it is still "in the process of reviwing [its] proposal". The US-listed, Eastern Europe-focused drinks firm, which owns Green Mark and Zubrowka vodkas, has been in ongoing discussions with Russian Standard for the past few weeks.
Some analysts believe that CEDC's weak finances mean it will be hard-pressed to refuse a deal. Late last year, Moody's warned that CEDC may default on its debt. Since then, the firm has signed new deals with Beam Inc in Poland and First Drinks in the UK.
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