Sazerac once again writes to Brown family shareholders seeking to restart negotiations to acquire Brown-Forman for $15 billion
The American liquor company Sazerac recently sent a letter to Brown-Forman’s Class A shareholders (including Brown family members and descendants of the company’s founder), requesting that the other party reconsider its previously rejected $15 billion acquisition offer. In the letter, Sazerac reiterated its $32 per share cash offer and said the proposal had been approved and Apollo Global Management, while other banks have expressed interest in participating in the transaction. Brown-Forman and the Brown family member group that controls the majority of Class A shares issued a joint statement rejecting Sazerac's active acquisition proposal, expressing confidence in the competitiveness of the business and believing that the company can create long-term value for all shareholders. Sazerac submitted its acquisition offer to Brown-Forman's board of directors on May 1 this year. According to the letter, the offer represents a premium of 37.9% and 40.4% for Class A shares and Class B shares respectively over the March 24 stock price. As of last Friday, Brown-Forman Class A shares closed at $26.71, with a market value of approximately $12 billion. Sazerac said the combined company would become the U.S. market leader in spirits sales and the second-largest spirits company in the world, behind Sazerac pointed out in the letter that it has tried to contact the Brown-Forman board of directors since the submission of the acquisition proposal, but no substantive discussions have yet occurred, saying that "the offer remains valid and confidence continues to grow" and that if the Brown-Forman board of directors is willing to participate in negotiations, it "stands ready to improve the offer conditions." Brown-Forman CEO Lawson Whiting announced earlier this month that he would step down once his successor is confirmed. Brown-Forman had previously discussed a merger with Absolut vodka maker Pernod Ricard, but talks broke down at the end of April, with Pernod saying the two sides had differences over the deal structure and economic terms. Sazerac, also headquartered in Louisville, is owned by William Goldring and his family and is currently operated by the third and fourth generations of the family. Sazerac had sales of $6.6 billion in the 12 months ended March, and Brown-Forman had sales of about $5.1 billion in the fiscal year ended April 30.