The Pressure's On Constellation
Constellation's Pressure – at Moneyweek.co.uk - the best of the week's international financial media.
Constellation Brands is like a "guest who arrives late at a dinner party", says Simon Nixon on Breakingviews.com. At some point the host will need to start the meal without him. Similarly Constellation launched its bid for Allied Domecq three weeks ago...but has not uttered a word since then.
Now the Takeover Panel has placed pressure on US Constellation to either put up or shut up' by 29 June, says Jenny Wiggins in the FT. As it is, Allied has already received one bid from French group Pernod Ricard, so any bid will need to trump the 679p per share offer already on the table. And this won't be easy, particularly considering that Constellation's consortium consists of four members: Constellation Brands, Brown-Forman, Lion Capital and the Blackstone Group all of which need to tackle both tax and pensions issues.
The Takeover Panel's ruling is certainly a shareholder-friendly ruling, says Nixon. Allied has already "pushed back Pernod as far as it can" in order to give Constellation more time. This allows Allied's shareholders to know exactly where they stand before they vote on 4 July. Constellation may have wanted more time to prepare its bid, but it can hardly complain: this gives it 60 days to put together a bid...more than enough time to "decide whether to turn up for a party".