Chris Brook-Carter

Allied's allies

By: Chris Brook-Carter - 22 August 2003 16:29

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Perhaps someone really knows something solid this time, or perhaps the leap in the share value of Allied Domecq yesterday was more the result of boredom in the long August weeks, where really exciting news on the markets is hard to come by.

For to be honest is seems extraordinary that Allied's shares should have jumped nearly 14p to 395p yesterday on the rumours that Brown-Forman was planning a takeover of its bigger rival. You would think investors would have heard the boy cry wolf enough times over a possible merger/takeover of Allied in the last few years.

Only a matter of months ago it was Bacardi who were linked to the Bristol-based group, now we are led to believe that a Jack Daniel's/Beefeater alliance is only a few signatures away - possibly with the help of Bacardi.

Certainly on the surface a Brown-Forman/Allied alliance is an attractive proposition, so if there is truth in the whispers then the excitement would be understandable.

But analysts believe a bidder is likely to need to pay 450p per share, or US$7.66 billion, for Allied, which seems a bigger bite than Brown-Forman could swallow, particularly as the American is not a pure drinks player, running among other businesses a luggage company.
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