US drinks giant in running to buy Whyte & Mackay
US drinks giant Brown-Forman is understood to be one of several parties considering second-round bids for the Whyte & Mackay whisky business, expected to fetch around £350 million.
The bulk of Glasgow-based Whyte & Mackay is being sold by Indian billionaire Vijay Mallya’s United Spirits to satisfy competition concerns arising from Diageo’s purchase of a controlling stake in the Indian drinks firm.
There are thought to be five parties interested in acquiring the business, including SPI Group, owner of Stolichnaya vodka, Italy’s Campari and private equity firms Lion Capital and TPG Capital Management were among the interested parties. Other media have reported that KKR was also bidding. Second-round bids are due on 17 April.
Brown-Forman came into the spotlight last week after a financial blog reported that the US maker of Jack Daniel’s whiskey was eyeing French cognac maker Remy Cointreau.
In addition to Jack Daniel’s, the Louisville, Kentucky-based company owns Southern Comfort and Herradura tequila.
Whyte & Mackay’s latest financial report and accounts show that pre-tax profits rose 27 per cent to almost £33.6m in the year to end-March 2013 from £26.3m last time. Turn-over increased from £227.2m to £263.4m.
The profit was struck after exceptional charges of £1.9m relating to “onerous” lease provisions, property costs and some business restructuring.
Whyte & Mackay, whose other brands include Isle of Jura, Glayva and Claymore, said the lease provisions related to properties in Glasgow and Edinburgh that are vacant or sub-let at a discount.
An Office of Fair Trading (OFT) investigation last year said there was “substantial competition” in the retail sector between Bell’s whisky, a Diageo label, and Whyte & Mackay’s own-label and branded blended whisky.
The OFT concluded that the likely loss of competition could give rise to higher prices for retailers and consumers.