Constellation loses thirst for Allied Domecq

Drinks giant Pernod Ricard was given a clear run at Allied Domecq today when a rival pulled out of the takeover race.

US-based Constellation Brands said it could not justify an offer for Allied because a deal would not create “sufficient value”.

Constellation, the world’s biggest wine maker, had teamed up with Southern Comfort owner Brown-Forman to try to gatecrash Pernod’s planned takeover. It had been given until the end of June to table a bid or walk away.

Chairman and chief executive Richard Sands said Constellation had approached the opportunity in a "disciplined and financial manner".

He said: “Simply put, careful consideration and evaluation of the details following due diligence did not identify sufficient value for submitting an offer.”

The Constellation consortium, backed by private equity firms Lion Capital and Blackstone, was said to be interested in Allied’s wines, which include Mumm, Montana and Perrier Jouet. It had made an indicative proposal but never made a formal bid.

Allied is known for brands such as Beefeater gin, Tia Maria and Courvoisier cognac, as well as Ballantine’s and Teacher’s scotch whisky.

It has 13,000 staff worldwide and also owns the food brands of Dunkin Donuts and Baskin-Robbins.

Today’s development left the way clear for French firm Pernod to continue with its €11m offer.

Pernod has forged a transatlantic alliance with Jim Beam bourbon owner Fortune Brands to fund the bid.

Key brands in the Pernod estate include leading whisky brands Chivas Regal, The Glenlivet and Clan Campbell.

Shareholders will be asked to approve the offer on July 4, paving the way for the deal to be completed on July 26.

Guinness and Smirnoff vodka maker Diageo recently confirmed it was interested in backing either Pernod or Constellation in return for ownership for certain spirits brands.