US: Constellation launches bid, Vincor rejects bid
Constellation Brands has launched a cash takeover bid for Vincor International after previous overtures came to naught. The US-based company yesterday (18 October) announced a bid of C$31.00 (US$26.45) per share. Vincor has immediately rejected the offer, however, while reconfirming that Constellation had earlier verbally presented a price indication of C$36 or higher.
"We are convinced that our C$31 per share cash offer is fully priced based on the information available to us, and is the best alternative for Vincor's shareholders, in terms of both value and certainty," said Richard Sands, Constellation's chairman and chief executive officer. "Our offer represents a 39% premium to Vincor's closing share price on 8 September, the day before we first proposed to acquire Vincor in a negotiated transaction. It provides substantial value to Vincor shareholders at a level well beyond what we believe Vincor could achieve on its own in the increasingly competitive global wine industry."
"Vincor's management and board of directors have rejected our efforts to complete a negotiated transaction." Sands added, "If an auction process exists, as Vincor announced, we have been excluded from it. If Vincor has provided information to any other parties, we are entitled to the same information as any other bidder. By making this offer, we are ensuring Vincor's shareholders have the right to choose an opportunity to realise superior, immediate and certain value for their shares."
"We believe Constellation is the best buyer for Vincor and that it is in the best interests of Vincor's shareholders, employees, suppliers and customers to consummate a transaction as soon as possible to limit any degradation of the business that may be caused by management prolonging this period of uncertainty," stated Sands.
Responding to the bid, Mark Hilson, chair of Vincor's special committee, said: "We continue to reject the price of C$31.00 per share as it is our view that it does not represent fair and full value for our company. We commenced a process to explore all possible alternatives to create shareholder value and we intend to see that process through to completion.
"Constellation is welcome to join that process if they can put forward an offer representing full and fair value," Hilson added.
The Vincor board said that it will be responding directly to shareholders with its recommendation in a Director's Circular in accordance with applicable law following the receipt and review of a formal offer.
Constellation said that it expects the offer to commence tomorrow, and is scheduled to expire at 5:00 p.m. Toronto time on Monday 28 November, unless extended.
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