The Scoop
Closely held liquor giant Brown-Forman — the subject of multiple takeover efforts in recent months — has rebuffed an approach from Buffalo Trace owner Sazerac, arguing that the $15 billion bid does not align with its “vision for Brown-Forman’s future.”
Sazerac had made an initial approach in May, according to people familiar with the matter and a letter reviewed by Semafor.
Sazerac directly reached out to Brown family members with the letter to inform them of the offer, according to people familiar with the matter.
Brown-Forman ignored that approach until Sunday, after Sazerac had reiterated that interest in a second letter Friday. The terms of the initial deal remain unchanged.
Some of Brown-Forman’s advisers had privately intimated to Sazerac’s advisers that the Brown family, the controlling shareholders of Brown-Forman, were not interested in the offer on the table weeks ago, according to some of the people.
Sazerac offered $32 per share for both the voting Class A shares — largely held by the Brown family — and the nonvoting Class B shares, according to the letter. Sazerac also offered the Brown family the option to roll their equity into Sazerac, giving them a degree of control and influence over the pro-forma company, and offered the family proportional board representation at Sazerac. Brown family members currently hold three board seats at Brown-Forman. Sazerac also offered a dividend above what Brown-Forman shareholders currently receive, which is about 22 cents a quarter per share.
“Sazerac stands ready to improve the terms of our offer, should the board engage with us,” Sazerac Executive Chairman Mark Brown and CEO Jake Wenz wrote in Friday’s letter. “We remain flexible.”
Spokespeople for Sazerac and Brown-Forman both declined to comment.
Know More
Brown-Forman’s controlling shareholders are a sprawling clan with nearly 150 family members scattered around the world. Brown-Forman, best known as the makers of Jack Daniel’s and Old Forrester, had steadfastly refused other takeover efforts in years past, according to people close with the family. But that posture shifted earlier this year, when they entered into deal talks with France’s Pernod-Ricard, another controlled company, about a merger .
News of the Pernod talks broke in The Wall Street Journal and prompted a higher bid from privately held Sazerac, which is controlled by the New Orleans-based Goldring family and has a lower profile than Pernod or Brown-Forman. That bid upended Pernod and Brown-Forman’s planned merger, and ultimately led to deal discussions being called off.
Pernod remains interested in a deal for Brown-Forman, people familiar with the matter had told Semafor. Brown-Forman has not fielded any formal interest from Pernod since the talks were called off, other people said, although the French company remains in a “cooling off” period where it cannot make another takeover approach.
“We are confident in the strength and competitive position of the business, and believe the company is well-positioned to deliver long-term value for all shareholders,” Brown-Forman’s controlling shareholder said in a release.