Editor's comment: Is liquor thicker than water - Charles Bronfman to battle the big boys?
As co-chairman, his role until a few years ago, was to act as the stabilising, if somewhat boring, voice on the board, reiterating the philosophy that certain businesses in the group such as drinks and its DuPont stake would be "around forever". But with nephew Edgar J. Bronfman Jnr. taking the reins, the style of the company changed, and having inherited his father's ambitious streak, the 24.2% stake in DuPont was sold and invested in the entertainment and music business.
Now the liquor business is superfluous to Edgar's dream company, Vivendi Universal, the $34 billion concern which the Bronfman's would own 8% of once the merger is approved. But he told analysts in New York a few weeks ago that the idea of a family member buying the drinks division "could not be ruled out".
Charles is rumoured to have appointed US investment bank Bear Stearns to prepare a bid of up to $7 billion. Sources close to the transaction, however, feel he must move quickly. Morgan Stanley Dean Witter is drawing up the offer memorandum which will be released in the next two weeks, not just to the family, but to Diageo, Allied Domecq and Pernod Ricard.
More speculation surrounds Diageo's consortium bid to scupper Allied's chances of success. Bacardi-Martini is alleged to be in discussion with Diageo to issue a joint bid. This deal would create more cost savings than Allied and is based around the two group's mutual respect after Bacardi acquired Dewar's scotch whisky and Bombay Sapphire gin from UDV in 1997.
Bacardi's only real problem, however, stems from that purchase. It paid £1.2 billion for the brands, a hefty price to pay, and is still debt-ridden. The family-owned venture is also regarded as "rudderless" by some analysts after CEO George 'Chip' Reid stepped down in March this year, frustrated at the family's decision to scrap its IPO aspirations.
Against such opposition, Charles would naturally seem out of his depth but the Bronfman family have a very strong bond. Can liquor really be thicker than water?
Anheuser-Busch has revealed plans to launch a new variant in its Bacardi Silver range....
The US consumer goods group Fortune Brands has confirmed it is in talks about launching a joint bid with Pernod Ricard for Allied Domecq....
Diageo is to launch a new global advertising campaign for Smirnoff Ice. The first ad in the global campaign, 'Garden', launches in Great Britain on April 11th on terrestrial and satellite TV. ...
Fideuram Wargny has upgraded its rating of Pernod Ricard to 'buy' from 'hold'. Its analysts argue that the merger talks with Allied Domecq is a catalyst for share growth....
Diageo has completed another share buyback transaction....
Brown-Forman has restructured its distribution set up for Europe, entering into new agreements for its spirits brands in a number of countries, including Italy, Spain, and Germany....
Fortune Brands has started making moves to acquire in the European drinks industry, according to press reports....
E&J Gallo has announced a number of appointments within its European division....
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