'Tentative discussions' reportedly held regarding Brown-Forman takeover of Remy Cointreau

Nevin Barich

April 4, 2014 (The Guardian) – Talk of a marriage between Jack Daniel's and Louis XIII cognac has driven shares in Rémy Cointreau as much as 10% higher.

According to the Betaville blog, "tentative discussions" have been held between investment banking advisers to the French cognac maker and Brown-Forman, which makes the Tennessee whiskey, although the chances of a takeover by the US drinks company at the moment are judged "very slim".

Embattled Rémy Cointreau issued a profit warning in early January, which put further pressure on its shares and fuelled speculation that it could be a takeover target.

Brown-Forman may not want to get left behind after the Japanese whisky maker Suntory bought the US bourbon producer Beam for $16bn in mid-January, making it the world's third-largest distilled drinks group.

Betaville said Brown-Forman was being advised by a number of banks including Goldman Sachs. Lazard was said to be representing Rémy Cointreau and its controlling shareholders, the Hériard Dubreuil family, who speak for 60% of the shares and are well represented on the board.

It is not known how the family view a possible tie-up with Brown-Forman. In the early 1990s, they backed the merger of their Rémy Martin business with Cointreau, which was owned by the Cointreau family.

The French company is run by François Hériard Dubreuil, the chairman, who replaced Frédéric Pflanz as interim chief executive in January when he left after just three months at the helm of the cognac producer.

Rémy Cointreau blamed a slowdown in sales of luxury goods in China – where Communist party leaders are cracking down on extravagant spending by officials – for falling sales and profits.

(c) 2014 Guardian Newspapers Limited.

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