Brown-Forman (NYSE:BF.A), the producer of Jack Daniel’s whiskey, said its board has reviewed an unsolicited takeover approach from privately owned spirits group Sazerac and determined that the proposal was “not actionable.”
According to sources familiar with the matter, Sazerac submitted a cash offer of $32 per share on May 1 in an attempt to acquire Brown-Forman.
Sazerac seeks discussions over proposed acquisition
Reuters reported that Sazerac, the New Orleans-based spirits company owned by Chairman William Goldring and his family, recently sent a letter to Brown-Forman’s Class A shareholders, the majority of whom are members of the Brown family along with several company directors.
In the letter, seen by Reuters, Sazerac said it wanted to engage with Brown-Forman’s board regarding both the financial terms of the proposal and its strategic rationale, adding that meaningful discussions had not yet taken place.
The company also stated that it remained willing to improve its offer should the board decide to enter negotiations.
Brown family backs company’s long-term strategy
Wolf Pen Branch, a group representing Brown family members who collectively control a majority of Brown-Forman’s Class A shares, reaffirmed its confidence in the company’s portfolio and long-term direction.
The group said Sazerac’s proposal does not align with its vision for Brown-Forman’s future.
Sazerac declined to comment, while Brown-Forman, which also owns brands including Woodford Reserve bourbon and Chambord liqueur, did not immediately respond to requests for comment.
Previous bid valued company at $15 billion
Reuters previously reported in May that Brown-Forman had rejected Sazerac’s $32-per-share cash proposal, which valued the company at approximately $15 billion.
According to the shareholder letter, the proposal would have allowed Class A shareholders to roll their holdings into the combined company while receiving governance protections, improved liquidity and a dividend exceeding Brown-Forman’s current payout.
The approach followed the collapse of merger discussions between Brown-Forman and Pernod Ricard in late April after the two companies failed to reach mutually acceptable terms.
Any transaction would ultimately require the approval of the Brown family, which has controlled Brown-Forman since 1870.
Earlier this month, the Louisville, Kentucky-based company also announced that President and Chief Executive Officer Lawson Whiting will retire once a successor has been appointed.