Blog: Chris Brook-CarterA tough game of catch-up

Chris Brook-Carter | 14 April 2005

The flood of media reports concerning Allied Domecq that has hit the world’s news pages has been enough to cause even the hardiest consumer of information indigestion this last week.

We hope, therefore, you have found our daily roundups of the leading angles of the story useful. If you haven’t seen them yet, I would suggest checking them out by following the link at the bottom of this blog.

As analysts finish weighing up possible outcomes for a successful Pernod/Fortune bid, the spotlight has inevitably turned this week to whether a rival offer for the owner of Teacher’s Scotch and Malibu coconut rum will emerge.

Allied investors will be hoping the company’s CEO Philip Bowman can flush one out. Bacardi is placed it firmly at the top of the list of potential suitors.

The Bermudan-based drinks group is believed by some sources to be sounding out a number of fellow spirits companies and venture capital firms about the prospect of mounting a joint assault on Allied. It would certainly be surprising if Bacardi not in the very least looking into the opportunity. The company will be left in Pernod’s wake if the French group is successful. Moreover, deals of a similar nature are very thin on the ground so Bacardi’s chances of successfully playing catch-up would be limited.

"Unless [Bacardi and Brown-Forman] have already looked at Allied and rejected a bid, we think it quite likely that they will assess Allied as an acquisition opportunity within the next few weeks. This has the potential to create a bidding war," said one analyst.

However, Bacardi is poorly positioned at the moment to launch such a bid. The company is without a CEO and is still grappling with the expensive acquisition of Grey Goose, which it bought last year. It is a situation that has led many analysts and commentators to believe the producer of the world’s favourite rum brand will sit this one out, happier to pick up the brands Fortune and Pernod are forced to sell after the event. 

Importantly, Pernod also has a significant head start on any rival bid, which may prove decisive in winning Allied approval.

For the latest on the Allied takeover bid, click here


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