Beam Worth The Premium? Brown-Forman In Play?

BofA/Merrill-Lynch’s highly nuanced analyst report on Suntory’s $83.50 all-cash bid for Beam implies some reasoned concern that the offer — which was 25% over Beam’s previous share price — could be too rich for the Japanese spirits giant to recover its investment, at least in the near future.

In addition. the firm’s January 13 analyst report stepped away from its previous investment opinions on Beam and changed its recommendation from “Buy” to “No rating.”

And while a number of analysts have dismissed the possibility of a bidding war because of the high price, an analysis of the key spirits companies along with their offerings by beverage category shows that a Beam acquisition could fill needed product gaps and possibly make them more competitive, especially in the red-hot bourbon category. And that last consideration could put Brown-Forman into play.

Wine Executive News subscribers please click here to read the complete article.

Also In This Article:

The full text of the following sections is available to premium subscribers of Wine Executive News.

• STRONG MOTIVATIONS FOR BIDDING WAR

• CHARTS OFFER INSIGHT ON OTHER DEAL MULTIPLES & COST SAVINGS

• BIDDING WAR? OR A BROWN-FORMAN TAKEOVER? BOTH?

• CHART: KEY SPIRITS BRANDS BY BEVERAGE CATEGORY SHOW MATCHUPS
  

Not a Wine Executive News subscriber yet?

Subscribe to Wine Executive News now, and get the rest of this original article along with everything else on the site every day, including original documents, spreadsheets,and source materials for just $19.99 per month Or $179 per year.