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CANADA: Vincor clears obstacle to takeover

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Vincor International has insisted its shareholders will block the hostile bid from Constellation Brands despite removing a key obstacle to the takeover.

The Canadian wine producer has scrapped a shareholder rights plan, a so-called "poison pill" strategy the company adopted following Constellation's C$1.4bn (US$1.2bn) bid in September.

Vincor said that, following talks with major shareholders, it "firmly believed" that Constellation's "opportunistic" and "financially inadequate" offer - worth C$31 a share - would be rejected.

"Constellation has from the outset engaged in a process of trying to acquire Vincor at a price that reflects neither the inherent value of Vincor, nor the substantial benefits to Constellation that would result from a transaction," said Mark Hilson, chairman of the special committee of independent directors of Vincor.

"The special committee and the board of Vincor are committed to facilitating a transaction that will deliver fair value for Vincor shareholders."

Vincor has told Constellation's financial advisors that it would grant the US drinks giant confidential information if it signed a confidentiality agreement or "proposed an acceptable price" for the company.

A Constellation spokesman declined to say whether the company would increase its bid but conceded that it was "leaving all options open".

"We are pleased that the shareholder rights plan has been removed and we are looking forward to moving ahead with our offer," he told just-drinks.

Vincor has signed confidentiality agreements and held high-level talks with at least five potential bidders after snubbing Constellation's bid but the company declined to name the interested parties.


Sectors: Wine

Companies: Constellation Brands

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