Constellation Brands Inc., the world's biggest winemaker, is ending its hostile pursuit of Vincor International Inc. after failing to entice shareholders of the Canadian wine producer with a $1 billion (Ђ850 million) cash bid. "Constellation could not let this process continue indefinitely," its chief executive, Richard Sands, said Friday. "In these circumstances, we will move on to other priorities."
A deadline passed Thursday night with Vincor shareholders passing up Constellation's "best and final offer" in a series dating back to Sept. 9, when it first proposed an acquisition. The takeover attempt was just the latest in Constellation's 17-year-long acquisition spree. Founded in 1945 in upstate New York's grape-growing Finger Lakes region, Constellation is now the only beer, wine and spirits company based in the United States and quietly became the world's No. 1 winemaker in 2003.
On Nov. 28, Constellation raised its cash offer for Vincor, Canada's largest winemaker, to $28.45 a share, or 33 Canadian dollars. That was quickly rejected by Vincor's board as inadequate, as was a conditional offer of 35 Canadian dollars per share that hinged on an examination of Vincor's books.
"We are gratified that shareholders have supported our recommendation that Constellation's offer was inadequate, opportunistic and should be rejected," said Mark Hilson, a Vincor director and chairman of a special committee that examined the proposal. While analysts had speculated that a deal might still be negotiated, the companies said they were not holding talks. "And there's nothing planned," Constellation spokesman Mike Martin added. Based in the Rochester suburb of Fairport, Constellation boasts more than 200 brands that run the gamut from jug wines to coveted California reds, beer imports such as Corona and St. Pauli Girl, and liquors like Fleischmann's vodka, Skol gin and Black Velvet Canadian whiskey. Constellation said its final offer was a 48 percent premium over Vincor's closing share price on the Toronto Stock Exchange on Sept. 8. As part of any deal for Vincor's 35.5 million shares, Constellation would have assumed about $260 million (Ђ220.6 million) in debt.
Vincor, based in Mississauga near Toronto, is North America's fourth-largest wine producer with 654 million Canadian dollars ($565 million) in fiscal 2005 revenues and 2,000 employees in Canada, U.S., Australia, New Zealand and South Africa. Its brands include Inniskillin, Jackson-Triggs, Toasted Head, Hogue and R.H. Phillips, reports the AP. N.U.