Vincor suitor sets deadline as no rivals emerge
In the absence of any other suitor for Canada’s leading wine company, New York-based Constellation Brands Inc. has firmed up its offer for Vincor International Inc. at $ 31 a share, or $ 1.5 billion, its opening gambit.
Vincor, which previously rejected the figure as too low and set about drumming up rival offers, said in a statement last night the offer ‘‘ does not represent fair and full value for the company.” So far, no one else has come forward to compete for the company, whose brands include leading Niagara region wineries Inniskillin and Jackson- Triggs, as well as properties in Australia and the United Kingdom.
“ We view Vincor’s auction process more like they’re throwing a party and wondering if anyone will come,” Constellation Brands’ chairman and chief executive officer Richard Sands said in a telephone interview late yesterday. Sands said his company is becoming impatient.
“ It has been six weeks since our initial proposal to acquire Vincor,” Sands said in a letter to Donald Triggs and Mark Hilson, his counterparts at the Mississaugabased wine company. “You have rejected efforts to complete a negotiated transaction. “Given the absence of any progress, we feel compelled to take our offer directly to your shareholders so they can accept this opportunity to realize superior, immediate and certain value for their shares,” Sands also said in the letter released yesterday after the markets closed. The world’s biggest winery, whose brands run the gamut from California winery Robert Mondavi to imported Corona beer and Black Velvet whisky, said shareholders have 35 days to tender to its offer, starting tomorrow. Most investors will wait until the last possible minute in hopes Constellation will be forced to sweeten its offer, either by competition from a rival, or by Vincor shareholders.
Vincor has been trading heavily since Constellation made its intentions public nearly three weeks ago, soaring in value to $36 a share after Vincor said Constellation had privately offered that much at one point. Constellation denies the claim but said it could go as high as $34 if Vincor opened its books to closer scrutiny.
In its statement yesterday, Vincor ‘‘ reconfirmed that Constellation had earlier verbally presented a price indication of $36 or higher.’’
Vincor’s board has rebuffed Constellation’s advances, saying the company is taking advantage of a temporary downturn in its business. Vincor’s shares plunged in August after the company reported worsethanquarterly results. While sales in Canada remain strong, its foreign assets faced increased price competition amid a glut of grapes.