Blog: Chris Brook-CarterDBR no longer the (Cha)lone bidder

Chris Brook-Carter | 16 December 2004

As Christmas approaches, it's tempting to think that things might wind down on the news front here at just-drinks, as we clear the decks after a hectic year and prepare for an equally busy 2005. Yesterday provided a timely reminder, however, that the year is far from over. In fact, we could have another bidding war on our hands.

California’s Chalone Wine Group rejected an existing buyout offer from French luxury wine maker Domaines Barons de Rothschild yesterday (13 December), saying it was now entertaining a better offer. Chalone refused to reveal who had made the advance, saying only that it came from a company with “significant wine operations.”

The new offer trumps Rothschild’s bid, first announced in May, of US$11.75 per share by an extra US$2. Rothschild had teamed up with Constellation and private Californian vintner The Huneeus Family to make the offer.

The Californian wine industry has had a colourful 12 months. As The Wine Group’s purchase of Golden State Vintners and Constellation acquisition of Robert Mondavi suggest, the pace of consolidation shows no sign of abating. So, who is the mystery courtier this time?

E&J Gallo gets linked with almost every acquisition opportunity in the state, but it isn’t the family-run company’s style to start a fight, and Constellation already has its thumb in the pie as part of the Rothschild joint venture. The Wine Group, meanwhile, is presumably happy digesting its GSV purchase earlier this year.

Our money is on the biggest looking to get even bigger. Allied Domecq is always keen to boost its premium wine portfolio, while Chalone could sit nicely on Diageo’s mantelpiece alongside Blossom Hill, if the spirit giant finally felt this was a wine acquisition it could squeeze a decent ROI out of.

Of course, if I was any good at this fortune-telling lark, I wouldn’t be sitting at this computer on a damp Tuesday morning in London, would I?


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