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By: Moderatore on Venerdì 10 Settembre 2004 22:16
W YORK (Dow Jones)--Brown-Forman Corp. (BFA, BFB) shares stumbled Friday on what the company attributed to the sale of stock by a non-affiliate Brown family trust.
In a press release Friday, the Louisville company said the sale of the stock was for diversification and estate planning purposes. The beneficial owners of the stock are not members of the management of the company.
Bloomberg L.P. earlier reported that the company was favored over rival Bacardi International Ltd. (BCD.YY) to buy Scotch maker Glenmorangie PLC
(GMGA.LN).
In the story, Isis Asset Management's Chris St John said Brown-Foreman held an
edge because it already owned 10% of Scotland-based Glenmorangie. Both
Brown-Forman, best known for its Jack Daniel's brand, and Bacardi have
distribution agreements with the company. Isis Asset is a shareholder in
Glenmorangie.
While the acquisition of a Scotch brand would help round out Brown-Forman's
product portfolio, some investors may question the value created from the deal,
said Brian Sudano of New York-based consultant Beverage Marketing Corp.
There appears to be little cost-saving synergies in facilities or distribution
with in the deal, Sudano said. Glenmorangie does well in the U.K., but it's
relatively unknown in the U.S., which already has several large brands
dominating the market.
Investors may also question the premium price Brown-Forman could pay in
acquiring the company. One analyst suggested this could be similar to Bacardi's
purchase of privately held Grey Goose, which some have considered a pricey
acquisition. While terms of the Grey Goose deal haven't been revealed, various
media reports peg it at $2 billion.
A spokesman for Brown-Forman wasn't immediately available for comment.
Glenmorangie spokeswoman Emma Kane said it doesn't comment on media reports
but said there were many potential buyers. The company hopes to have an
announcement in October.
Bacardi spokeswoman Patricia Neal said the company doesn't discuss speculation
or rumors.
Late last month, the family holding a majority stake in Glenmorangie said it
wished to sell its stake in the company. Analysts said the price tag could be as
much as GBP300 million.
Brown-Forman class B stock recently traded at $46.31, down $2.73, or 5.6%, on
volume of 1.2 million. Average daily volume is 128,655. Class A shares traded at
$46.50, down 5.8%, or $2.85 on volume of 10,100. Average daily volume is 5,420.
-By Roger Cheng, Dow Jones Newswires; 201-938-5393; roger.cheng@dowjones.com
(END) Dow Jones Newswires
