Investors back CEDC strategy

Investors back CEDC strategy

Investors in the Central European Distribution Corp have backed the company's decision to walk away from a possible takeover of vodka group Nemiroff.

Central European Distribution Corp's (CEDC) share price leapt by 8% in early trading on the New York Stock Exchange today (7 July), following its announcement on Nemiroff several hours earlier.

The Zubrowka and Bols owner had planned to use proceeds from the sale of its Polish distribution business to bid for Ukraine-based Nemiroff.

But, the firm said that it will, instead, use the money to either instigate a share buy-back or pay down debt.

"We are still on track to close the sale of our Polish distribution business in the beginning of August 2010, and expect to determine the use of proceeds shortly thereafter," said group CEO William Carey.

He said that CEDC would focus on organic growth, particularly in Russia.

"We have invested over US$1.5bn over the last three years in Russia and will look to maximise the return on this deployed capital," said Carey. "We believe we have a solid leading market position to capture further growth in the region in the next three to five years and management will continue to focus on maximising this opportunity."