Could a buyer swoop for Laurent-Perrier?

Could a buyer swoop for Laurent-Perrier?

Champagne house Laurent-Perrier could be a takeover target after a disappointing full-year statement this week, according to independent analyst Veronique Adam.

Laurent-Perrier's net profits tumbled by 44% to EUR10.6m for the 12 months to the end of March, with operating profits of EUR28.7m, down 34% on the previous year.

Sales also fell, by 5% to EUR31.2m, despite a resurgence in the final quarter.

The figures sent Laurent-Perrier's share price down 5% on Tuesday and shares remain down by 10% compared to a month ago, reflecting uncertainty in the global Champagne market.

"Premium pricing went too far, reducing medium term visibility," said independent analyst Veronique Adam. "In addition, management turmoil is a concern," she said, referring to the departure of chairman Stephane Tsassis last week.

"Laurent-Perrier looks fundamentally fully priced but remains a highly attractive take over target in Champagne," said Adam, who writes for her Pablofinance blog after spending 15 years as a food and drink analyst with JPMorgan.

Bids for the business could begin at EUR70 per share, EUR3 higher than the group's current trading price, she added.

Adam echoed other analysts in advising caution on the year ahead.

"H2 looks more uncertain considering Laurent Perrier’s exposure to Europe, notably the UK (15-20% of sales). Consumers in all the major economies expressed lower confidence in May, which shows the fragility of the recovery," she said.

For analysis on Champagne sales in the early months of 2010, click here.