Competish spirited for Seagram liquor biz
Diageo, Pernod battle with Allied in bidding war
New partners Diageo of the U.K., the world's biggest liquor group, and Pernod Ricard of France will most likely be going up against giant Allied Domecq. That could trigger a bidding war that may push the price of the Seagram division as high as $9 billion, Wall Streeters speculated.
Diageo brands include Johnny Walker, Guinness and Burger King, while Pernod owns Wild Turkey bourbon, Havana Club rum and Orangina.
Allied Domecq, which hasn't said publicly that it plans to bid, holds Ballantine's Scotch, Canadian Club whiskey and Beefeater gin, as well as the Dunkin' Donuts and Baskin-Robbins chains.
Seagram is selling off the beverage biz as part of its planned acquisition by France's Vivendi, which Seagram execs have said they expect to close in November. The combined company will use sale proceeds, which were initially anticipated to be somewhere in the $7 billion range, to help pay down debt.
Certain members of the Seagram family, most of whom will wind up with Vivendi stock and no involvement in the day-to-day running of the new entity, are also said to be eager to buy back the historic spirits biz they founded years ago. Seagram owns brands Chivas Regal, Martell cognac, Crown Royal Canadian whiskey and Captain Morgan rum -- along with lucrative distribution rights to Absolut vodka.
"For us, the more bids the better," said a person close to Seagram.
