A GROUP of whisky investors could be in line for a £25 million pay day after French drinks giant Rémy Cointreau revealed on Monday that it was in “exclusive talks” to take over the Bruichladdich distillery on Islay.
Analysts believe the site – which was mothballed in 1995 then reopened in 2001 by a team led by managing director Mark Reynier – is “worth a premium” because of strong Scotch sales in fast-growing emerging economies.
Paris-listed Rémy, which doesn’t own any other whisky brands and which pulled out of a distribution deal with Famous Grouse-maker Edrington in 2009, is sitting on a €1 billion (£790m) war chest following the sale last year of its champagne business.
Although taking over Bruichladdich would only use up a small fraction of the company’s reserves, analysts at Bernstein said a “generous” valuation could see the distillery fetch £25m. Another analyst said the figure was “punchy but not crazy”.
Profits at Bruichladdich hit £1.44m in 2011, edging up from £1.43m in 2010, while turnover jumped by 24 per cent to £8.7m, according to recently-filed accounts at Companies House.
Alan Gray, the respected whisky analyst at Edinburgh-based stockbroking firm Sutherlands, said: “From Rémy’s point of view, it makes sense because they want to expand into whisky.
“Mark was very much the brainchild behind Bruichladdich; he and Simon Coughlin got it off the ground, along with Jim McEwan.
“It’s been a success story and, if the deal comes to pass, there’s no doubt the investors will have done very well out of it, whatever price they get.”
Reynier remained tighted-lipped over the details of the talks. But he told The Scotsman: “Rémy has been following our progress for a while. They have a very dynamic team. They are fairly-advanced talks. We all have mixed emotions here about it but clearly it’s very good news for Bruichladdich.”
Reynier, a former London wine merchant, has fended off a number of approaches for the distillery in the past and has fiercely defended the company’s independence, railing against the large proportion of the whisky industry that is controlled by a very small number of very large firms.
Last year the firm – which employs about 50 staff, making it Islay’s second-largest employer – secured a £9.5m finance package from HSBC in order to boost production of its single malt whiskies and its Botanist gin brand. Bruichladdich was built in 1881, but was mothballed by Jim Beam in 1995.
If the deal is completed then the French spirits maker – which owns brands including Rémy Martin brandy, Cointreau orange-flavoured liqueur and Mount Gay rum – said that Bruichladdich would benefit from Remy’s distribution network, particularly in Asia. Brandy, like whisky, has enjoyed a surge in popularity in the Far East.
Rémy is looking to emulate fellow French firms Pernod Ricard and Louis Vuitton Moët Hennessy (LVMH), which already have Scotch brands. Pernod owns Chivas Brothers, Scotland’s second-largest whisky maker, while LVMH has Ardbeg and Glenmorangie.
• Inver House Distillers – which makes whiskies including Hankey Bannister, Old Pulteney and Speyburn – posted a 61 per cent leap in profits as sales surged in emerging markets on Monday.
Pre-tax profits jumped to £15.5m from £9.6m on the back of a 28 per cent rise in sales to £80.6m, driven by demand in eastern Europe, South America and southern Africa. Inver House is owned by Chang Beer maker ThaiBev.