UK: Weekend press fallout - Allied & Pernod

A host of drinks companies spent the weekend mulling over whether to launch counter-bids for Allied Domecq, according to press reports over the last few days. Bacardi and Constellation appear to be leading the charge.

Both the Business and the Sunday Times said yesterday that Bacardi is considering bidding. The family-owned company's chairman, Ruben Rodriguez, has previously held talks with Allied chief Philip Bowman regarding a merger, the Business said. Some of the 100 family shareholders who control Bacardi want to see if anything can be done to resurrect a deal and outbid Pernod, the Business added.

One insider close to Bacardi told the Business that it could still make a bid. Being domiciled in Bermuda, it benefits from a low tax rate, which could give it an edge on Pernod. The Sunday Times pointed out, however, that Bacardi might struggle to play a part in any deal, given its shareholding structure.

Several papers, including the Sunday Times and the Independent, said that Constellation is racing to find partners to launch a counter-bid. Citing industry sources, the Sunday Times said that Constellation wants to seek talks with drinks companies such as Bacardi, Brown-Forman and Diageo about making a bid.

Today's Independent said that the US group has appointed NM Rothschild and Merrill Lynch to advise it on a possible bid for Allied. Their work has become more intense since details of the Pernod offer were published on Thursday, the paper claimed.

Allied has not signed an exclusive agreement with Pernod. One observer told the Sunday Times: "It is hard to imagine that as the last pretty girl on the dance floor, Allied is not going to have a number of people trying to dance with her."