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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF -- Ignore unavailable to you. Want to Upgrade?

To: Lost in New York who wrote (14353)	3/30/1998 7:15:00 AM
From: Glenn D. Rudolph	Respond to of 22053

FOCUS-Diageosells top U.S scotch to Bacardi Reuters Story - March 30, 1998 06:29 %BEV %BM %GB %MRG DGE.L ALLD.L VO.TO BFa PERP.PA V%REUTER P%RTR (adds analyst comment, more detail) By Tim Farrand LONDON, March 30 (Reuters) - The world's largest spirits company Diageo Plc fetched a much higher than expected price on Monday for the sale of its Dewar's scotch whisky and two Bombay gin brands. The sale, for 1.15 billion pounds ($1.9 billion) to Bermuda-based privately-owned drinks group Bacardi will make Diageo a profit after all costs and tax of 460 million pounds. "It was a much higher price than we thought it was going for. We did not have in such high profit numbers for the brands," said Merrill Lynch drinks industry analyst John Beaumont. Merrill Lynch based its values on a forecast annual profit for Dewar's of about 55-60 million pounds and for Bombay Sapphire and Bombay Original gin brands as some 10 million. All three brands turned in a combined 95 million pounds profits in 1997. Dewar's, which sells about 2.7 million 12-bottle cases a year is the best selling scotch whisky in the U.S., while Bombay Sapphire premium gin is one of Diageo's fastest growing brands. The sale, widely flagged in the press, was insisted on by the U.S. Federal Trade Commission as a condition of the merger between Grand Metropolitan and Guinness agreed last year. Diageo, which announced an auction for the brands some three months ago, was inundated with offers, fielding about 20 bids for Dewar's and 30 for Bombay. "The fact they have got rid of both brands to one buyer makes it look cleaner and it's well inside the time frame set by the US regulator," said SocGen analyst Nick Lyall. The Federal Trade Commission insisted on the disposals by June 8. Diageo and investment bank Credit Suisse First Boston whittled down the offers in the final weeks to about five potential contenders after British drinks to retail group Allied Domecq Plc withdrew. The names widely touted as front runners in the industry included Canadian entertainment to drinks group Seagram Co Ltd , America's Brown-Forman Corp ,and France's Pernod Ricard SA and an two unidentified financial buyers. The sale includes a 15 year supply blending and storage arrangement for scotch whisky, and the acquisition by Bacardi of four Diageo distilleries. The 49 staff employed at the four Scottish distilleries are expected to transfer to Bacardi. The distilleries are at Aberfeldy in Perthshire, and three in the Speyside region of north east of Scotland, Aultmore, Craigellachie, Royal Brackla. Diageo have also agreed to continue bottling Dewar's for Bacardi for up to two years. Bacardi already owns a bottling plant in Glasgow, Scotland turning out William Lawson scotch whisky. Bacardi was created in 1862 in Cuba by Don Facundo Bacardi and is currently run by his descendants in Bermuda after the family fled Fidel Castro's regime in 1960. The group acquired a majority stake in Italian vermouths operation Martini and Rossi in 1992 for $1.4 billion. Diageo shares were off 2 percent, or 14 pence, at 696p in early trade as the stock went ex-dividend. ($ = 0.594 British Pounds)