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Constellation Brands has questioned the recommendation made by the board of directors of Vincor International that its shareholders reject its C$31 per share cash offer.

"Vincor shareholders have every right to be disappointed with the action - or inaction - of their board of directors," said Richard Sands, Constellation Brands' chairman, in a statement. "It has been almost two months since we approached Vincor with a proposal and more than a month since we announced we were prepared to pay C$31 per share in cash. In all that time, the Vincor board has failed to demonstrate concrete steps to deliver maximum value to its shareholders."

"Vincor's board remains entrenched in the position it took even before we announced our offer. Its reasons were flawed then and are flawed now, yet Vincor's board continues to reject the only existing value-enhancing alternative for its shareholders," Sands continued. "The Vincor board's response to Constellation is not based on performance but only on their expectations, their plans and prospects that only they can see."

The Constellation statement said Vincor's shareholders should be asking their board and management where Vincor shares would be trading in the absence of the Constellation offer.

"Prior to the announcement of the Constellation proposal, Vincor shares were trading in the low C$20s and heading lower. Its recent financial performance, including declining operating income, continues a long trend of being below market expectations," the statement said.

Constellation also said Vincor continued to underperform. "The contribution of Vincor's smaller-scale international operations continues to be weak and sales in its core Canadian market grew by only 6%," it said.

The players also asked if the board had found anyone willing to pay more for Vincor than Constellation's offer. "Constellation's offer of C$31 per share in cash, which offers full and fair value as well as the certainty of cash and an established closing date, remains the best and only alternative available to Vincor's shareholders," it said.

"The question Vincor shareholders should ask themselves is simply whether they choose to benefit from Constellation's immediate all-cash offer or accept the continued risk and uncertainty of the board's promises," Sands said. "Throughout this process, Constellation has been clear, fair and accessible - in stark contrast to Vincor. We believe that the entrenched position of Vincor's board and management threatens their suppliers, customers, business partners, employees, and most especially, Vincor's shareholders."

Constellation commenced its cash takeover bid on 20 October. The offer expires at 5:00 pm Toronto time on 28 November, unless extended.


Sectors: Wine

Companies: Constellation Brands

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