www.beverageworld.com/content/view/34019/ -
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Published on: 11/15/2007
Last Visited: 11/16/2007
While the Swedish finance ministry has steadfastly refused to put a timeframe to the privatisation processes, or indeed say in which order the companies will be privatised, Credit Suisse beverage analyst Michael Bleakley told Thomson Financial News he expects the sale is "going to be done in the next 3-6 months."
The Swedish authorities have said they are open to considering a possible stock market flotation of the business, but a trade sale is being viewed as the the most likely means to achieve the highest value.
"You get the industry to pay up for the business and the synergies going forward and you can get that without having to pay listing costs and listing fees," said Bleakley.
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Credit Suisse's Michael Bleakley believes the sale is an indication the group is "preparing the ground" for the Absolut auction, with Fortune Brands having the added advantage of not having to stump up the exit costs for V&S's international distribution agreement with Maxxium (in which Fortune is also and participant) and Future Brands (in which Fortune is the only other partner).
"They've got a billion dollar head start," said Bleakley."But if the auction goes to the highest bidder -- which I think one has to read the Swedish Government would like to see -- then Fortune have got a point at which they have to leave the negotiation table in terms of not having quite as deep a pocket as some of the European players."
Bleakley believes that even after selling its wine operations and despite its 1 billion usd advantage, Fortune's net debt to EBITDA would be around 6 times, which he said is arguably too high.