Jack Daniel's Maker Brown-Forman to Favor Pernod Ricard Bid Over Sazerac, Source Says

Jack Daniel's maker Brown-Forman favors Pernod Ricard bid over Sazerac, source says

Brown-Forman's Acquisition Bids: Pernod Ricard vs. Sazerac

By Echo Wang and Abigail Summerville

Background on the Acquisition Talks

April 20 (Reuters) - The family that controls Jack Daniel's maker Brown-Forman favors a potential sale to French distiller Pernod Ricard over a rival proposal from American spirits group Sazerac, a person familiar with the matter told Reuters on Monday.

The family views Pernod as the more prestigious acquirer, with a portfolio of stronger and more recognizable brands, according to the person, who asked not to be identified while discussing private deliberations.

Details of the Competing Bids

Sazerac, which houses brands such as Corazon tequila and Svedka vodka, emerged as a fresh bidder for Brown-Forman earlier this month, after Pernod said in March it was in talks about a possible merger, which would create the world's No. 2 spirits maker by sales behind London-based Diageo.

Terms and Structure of the Pernod Ricard Offer

The proposed terms, which combine cash and stock, would also allow the family to retain a meaningful stake and some degree of influence in the combined company, the source said on Monday.

The Pernod bid being contemplated would be 80% stock and 20% cash, although it was subject to change, another source told Reuters on Monday.

Sazerac's Proposal and Market Reactions

Sazerac, controlled by the Goldring family, has offered Brown-Forman about $15 billion, or $32 per share, a source familiar with the matter said last week.

Unlike Sazerac's more traditional buyout offer, analysts have said the deal with Pernod could involve a share swap, which would allow the Brown family to preserve some control over the iconic bourbon maker it has run since 1870.

Market Impact and Industry Response

Shares of Brown-Forman, which has a market capitalization of $13.47 billion, were down about 1% at $28.94 on Monday, while shares in Pernod, valued at about 17 billion euros ($20.01 billion), were flat.

Pernod, Brown-Forman and Sazerac have all declined to comment. Bloomberg News first reported on Brown-Forman favoring the Pernod deal earlier in the day.

Additional Information

($1 = 0.8494 euros)

(Reporting by Echo Wang and Abigail Summerville in New York; Additional reporting by Sanskriti Shekhar in Bengaluru; Editing by Shilpi Majumdar)