UK: Pernod rating raised on Allied talks
Pernod Ricard has had its rating raised. Merrill Lynch has upgraded the drinks company to 'neutral' from 'sell,' on the belief that current takeover discussions with Allied Domecq will lead to a full bid.
An acquisition of Allied would be materially value creative for Pernod, Merrill Lynch believes. Based on a 'most likely' scenario for the bid structure, Merrill Lynch has upped its Theoretical Fair Value (TFV) for Pernod's shares to €109 from €93.
Merrill has assumed that Pernod will bid 675 pence per share for Allied and has calculated an EPS enhancement of 17% once the assumed GBP150m of synergy gains are accessed.
Despite this bullish view, Merrill pointed out that full upside from any deal will not come through until mid-2008 and there will be no 'instant synergies' like in the Seagram acquisition.
Moreover, Merrill highlighted that it has had material questions about the quality and sustainability of the growth coming from Pernod's business and argued that an Allied deal will not solve these issues.
It's been a quiet day on the Pernod/Allied Domecq front....
Conflicting reports circulated this weekend over whether Bacardi International is looking to form a counter-bid for Allied Domecq....
Todays press reports into Pernod and Fortune's hopes to buy Allied Domecq warn of possible conflicts and set a date for completion....
Allied Domecq has added a new flavour to its Malibu range. The company said yesterday that it would be launching Malibu Passion Fruit in the US from April 15....
Pernod Ricard and Fortune Brands are considering a US$13 billion bid for Allied Domecq, the world's second-largest spirits company. Were it to take place, Pernod and Fortune would split Allied's brand...
Pernod Ricard and Fortune Brands are hoping to buy Allied Domecq for around 670p per share, according to press reports....
LVMH has said it is not looking to buy Mumm Champagne from Allied Domecq....
The US consumer goods group Fortune Brands has confirmed it is in talks about launching a joint bid with Pernod Ricard for Allied Domecq....
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