Constellation drops Domecq bid plan

AMERICAN drinks giant Constellation Brands has ruled out entering the bidding for Allied Domecq, saying the British company does not represent good enough value.

'Careful consideration and evaluation of the details following due diligence did not identify sufficient value for submitting an offer,' said chairman and chief executive Richard Sands.

That leaves the way clear for an agreed cash-and-shares bid from Pernod, which the Domecq board recommended in April. Constellation is part of a consortium with Brown-Forman, Lion Capital and Blackstone Group, that was doing due diligence on Domecq.

Sands said: 'Constellation approached this opportunity in a disciplined strategic and financial manner and does not believe that the economics justify an offer.'

But he signalled that the decision to drop a bid for Allied did not mean it was quitting the acquisitions trail. 'We will remain a determined and disciplined buyer,' he said.

The Takeover Panel had told the consortium it must put up or shut up by 29 June. European regulators last week approved the sale by Domecq and Pernod Ricard of several liquor products to US spirits maker Fortune Brands as part of Pernod's bid to buy Domecq for £7.6bn. Pernod has also agreed to sell on Irish whiskey brand Bushmills to Diageo.

Fortune picks up the Laphroaig Scotch, Sauza tequila and Courvoisier brandy brands in the deal.