THE prospect of a bruising corporate battle for Allied Domecq intensified yesterday after the British spirits group said US-based Constellation Brands made an "indicative proposal" regarding a possible bid for the company. Constellation has already approached Allied about a potential offer.
Any firm bid from the consortium led by Constellation would rival the pounds-7.4bn buy-out proposal from French-based Pernod Ricard announced last month, which has won Allied's support.
The UK firm said the proposal from Constellation is "highly conditional, being subject to considerable further due diligence, confirmation of financing and a number of other significant conditions."
In a statement to the London Stock Exchange, Allied said: "It is too early to ascertain whether the indicative proposal will translate into a firm offer for Allied Domecq." It did not provide any details of the proposal.
Allied first said on April 27 that Constellation, the world's largest winemaker with brands like Almaden, Inglenook, Hardys and Ravenswood, had teamed up with Brown-Forman, whose brands include Southern Comfort and Jack Daniels, and private equity firms Lion Capital and Blackstone to mull over an offer.
Allied said it would continue to discuss the proposal with the Constellation consortium while also working to "progress the offer" from Pernod.
Allied had recommended on April 21 that shareholders accept the takeover offer from its smaller, Paris-based rival in a deal that would make the combined entity the secondlargest liquor company and a more serious challenger to world leader Diageo.
Allied has agreed to pay Pernod a pounds-37m penalty if a competing offer made within six months of last week's announcement is successful.
Pernod is offering Allied investors the equivalent of 670p perAllied share and plans to acquire Allied Domecq brands including Beefeater gin, Malibu rum, Stolichnaya vodka and Ballantine's whisky.
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