Brown-Forman rejects Sazerac's renewed $15 billion takeover bid
The Jack Daniel's maker's board said the unsolicited $32-per-share all-cash offer from the privately held spirits producer was "not actionable," even as Sazerac urged shareholders to push for negotiations.
Brown-Forman Corp. rejected a renewed $15 billion takeover bid from privately held spirits producer Sazerac Co., with the Jack Daniel's maker's board calling the unsolicited all-cash offer of $32 per share "not actionable."
The bid represents a 22.7 percent premium to Brown-Forman's Friday closing price of $26.08, according to a letter from Sazerac seen by Bloomberg. Sazerac wrote to Brown-Forman's shareholders and directors asking them to reconsider the proposal, which was first rebuffed earlier this year, and said it is willing to improve terms if the board engages in negotiations.
"The board determined that the unsolicited proposal is not actionable," Brown-Forman said in a statement Sunday, without elaborating on its reasoning. A group of Brown family members representing a majority of the company's voting power has backed the board's decision to remain independent, according to people familiar with the matter.
Why Sazerac keeps coming back
Sazerac's persistence reflects the scarcity value of iconic American spirits brands. Brown-Forman's portfolio includes Jack Daniel's, the world's best-selling American whiskey, along with Finlandia vodka and Herradura tequila — assets that rarely come to market. The company's dual-class share structure, which concentrates voting power with the founding Brown family, has long been seen as a barrier to any takeover.
The rejection leaves Sazerac with limited options. The New Orleans-based distiller, known for brands including Fireball cinnamon whiskey and Buffalo Trace bourbon, could raise its offer or take its case directly to shareholders through a tender offer. However, the Brown family's voting control makes a hostile bid difficult to execute without board support.
What happens next
Brown-Forman shares, which have fallen about 12 percent this year through Friday, could see renewed interest from arbitrageurs betting on a higher bid or the emergence of another suitor. The company's market capitalization stood at roughly $12.5 billion before the offer was disclosed, meaning Sazerac's bid already prices in a significant control premium.
For Sazerac, walking away means ceding the chance to acquire one of the few remaining independent whiskey giants in an industry where consolidation has accelerated. Pernod Ricard SA and Diageo Plc have both made major acquisitions in recent years, shrinking the pool of available trophy assets.
This article is for informational purposes only and does not constitute investment advice.
