Constellation raises hostile bid for Vincor

NEW YORK - US winemaker Constellation Brands yesterday raised its hostile bid for Canadian rival Vincor International to a "final offer" of more than C$1.1 billion ($1.36 billion) - only to be rejected by Vincor again.

Constellation, the world's largest wine company, lifted its unsolicited bid to C$33 a share, up from its September offer of C$31 in cash. It added that after due diligence, and if it received support from Vincor's board, it would be prepared to increase its "best and final" offer to C$35 per share.

Vincor said it was encouraged by the latest offer but rejected it, because its board's view of a price sufficient to gain access to its non-public information would be in the range of C$39.33 to C$76.14 a share.

"Constellation will get access to our data room after they increase their offer to an acceptable level," said Mark Hilson, chairman of the special committee of independent directors of Vincor.

Shares of Vincor, brands of which include Inniskillin and Jackson-Triggs, have shot up 47 per cent since the offer was made public. Constellation shares, on the other hand, have fallen 11.5 per cent during that period.

One analyst with a "buy" rating on Constellation Brands said the US company could emerge a winner.

"Absent an alternative bid or proposal from Vincor, which seems less and less likely as two months have passed since Constellation's premium all-cash bid, we believe the likelihood is that Constellation will own Vincor by year-end, with or without the board's approval," Legg Mason analyst Mark Swartzberg wrote in a note released yesterday.

Vincor had rejected Constellation's September offer, which was set to expire yesterday, saying it was "opportunistic and financially inadequate", and had said it was in talks with numerous interested parties.

Constellation chairman and chief executive Richard Sands in turn had said the C$31 offer was firm and binding.

- REUTERS