AUSTRALIA: Jackson ends K-J sale process as Hardy's shareprice lifts
Yesterday K-J's chief executive Lewis E Platt confirmed that sale and merger discussions had ended. Platt said that although he was very pleased with "the level of interest", K-J had decided that "remaining an independent family-owned winery is the best choice for Kendall-Jackson at this time. This is the path we have chosen to follow."
He continued: "For that reason, we have terminated these discussions related to a sale or merger. We are not considering, at this time, a move into the public capital markets, choosing to instead rely on the same type of traditional bank and private placement financing we have employed in the past."
In Australia the stock market greeted BRL Hardy's news that it was not willing to pay K-J's final asking price with good cheer, sending the Oz winemaker's shareprice up A$0.27 to close at A$9.07 (US$7).
Hardy's managing director Stephen Millar said that K-J had increased its final
asking price after bids were received. He would not discuss the levels of the
bids or the final sale price but said: "After we submitted our final bid,
they came back to us with a final asking price that was not in the best interests
of our shareholders."
Millar said BRL would "continue to pursue its other options in the United States" to achieve its strategic objectives of building a stronger base for the distribution of its Australasian brands and developing a US brand for the US market.
Analysts believe a strategic tie of some sort with Constellation Brands, the US's second largest wine supplier may now be Hardy's best option. There are also fears that the end to Hardy's K-J hopes may make the Aussie producer more of a takeover target itself.
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