Diageo mulls rival bid for Allied - report

Thursday, 28 April 2005

The world's leading wines and spirits giant Diageo has begun talks with Bermuda-based rival Bacardi, looking to enter the bidding war for British peer Allied Domecq, The Times newspaper reported today.

The move would create a three-way battle after it was confirmed last night that Allied received a 'preliminary approach' concerning a potential takeover offer from a consortium including the US groups Constellation Brands and Brown-Forman.

It followed French peer Pernod Ricard's £7.4 billion sterling recommended takeover offer last week, which offered 670 pence a share in association with US group Fortune Brands.

As recently as February, Diageo CEO Paul Walsh had ruled out a bid for Allied, producer of Beefeater gin, Tia Maria and Courvoisier cognac, as well as Ballantine's and Teacher's whiskey.

But it was understood Diageo, which produces Guinness, Johnnie Walker whisky and Smirnoff vodka, held 'preliminary talks' with rum maker Bacardi, the newspaper reported.

Meanwhile Brown-Forman, whose brands including Southern Comfort and Jack Daniels, confirmed its joint approach with Constellation Brands and private equity groups Lion Capital (formerly Hicks Muse Europe) and Blackstone.

Pernod Ricard - the maker of Glenlivet whisky and Havana Club rum - said last week its agreed takeover would create the 'second-largest spirits and wines company worldwide' and the 'number one spirits company outside the US'.