Brown-Forman prefers family control over all-cash deal, report says
AI-generated summary reviewed by our newsroom.
- Brown family members, who control about 70% of voting shares, prefer Pernod Ricard offer
- Sazerac has offered $15 billion, about $32 per share.
- Reports say the Pernod deal would be about 80% stock and 20% cash, keep Louisville ties.
Brown-Forman has a preferred suitor for the hand of the Kentucky bourbon maker.
Bloomberg reported the controlling family members of Brown-Forman prefer Pernod Ricard’s merger offer over Sazerac’s all-cash buyout.
According to the Wall Street Journal, competing bourbon maker Sazerac has offered $15 billion for the maker of Jack Daniel’s, Woodford Reserve, Old Forester and more. That would come out to about $32 a share. But Seeking Alpha reported on Monday that members of the Brown family, who own about 50% to 70% of the voting shares, prefer the original “merger of equals” proposal from French spirits company Pernod Ricard.
The Pernod deal reportedly would keep some part of the business headquartered in Louisville, and keep more control in the hands for the Brown family.
While Brown-Forman is publicly traded, the controlling shares are largely in the hands of Brown family members. Similarly, Pernod Ricard is controlled by a combination of institutional investors and members of the Ricard family, with Alexandre Ricard serving as chairman and CEO. Sazerac is privately held by the Goldring family.
“The deal being bandied about would be 80% in stock and 20% in cash,” Seeking Alpha reported.
The deal would bring together two of the largest players in the spirits industry: Brown-Forman owns the top-selling American whiskey — Jack Daniel’s — in the world, as well as Herradura Tequila and Diplomatico rum, along with other brands. Through Woodford Reserve, the company is the presenting sponsor of the Kentucky Derby.
Pernod is the second-largest spirits group in the world, behind only British giant Diageo, and owns Beefeater gin, Absolut vodka, Chivas Regal Scotch and more. Pernod owns Rabbit Hole and Jefferson’s Bourbon brands in Kentucky.
Both companies are battling sales slumps that have been affected by declining alcohol consumption and economic uncertainty.
By contrast, Sazerac has been on a building boom, announcing more than $1 billion in planned expansions in Kentucky and Indiana.
The company also recently bought out the debt on a shuttered Kentucky distillery, Garrard County Distilling, and has pushed for foreclosure sale with plans to bid on the property.
Sazerac is best known as the maker of Pappy Van Winkle bourbons and Buffalo Trace, Blanton’s, Weller, Eagle Rare but owns other spirits including Southern Comfort.
