Diageo denies 'delaying tactics' on Allied bid
Drinks giant Diageo has rejected suggestions that it is using delaying tactics to thwart Pernod Ricard's bid for Allied Domecq.
Currently the subject of a £7.5bn bid tabled by the French wine and spirit company, Allied has also attracted the attention of a consortium led by Constellation Brands and Brown-Forman of the US.
But the prospect of a number of highly sought-after brands becoming available in any fallout from a bid for Allied has led Diageo to raise its head above the parapet.
Speaking to journalists in London this week, Diageo chief executive Paul Walsh (pictured) acknowledged his company was watching developments "with great interest".
He hinted Diageo would be "well-placed" to help either the consortium or Pernod Ricard raise the bar on the bid, but added no decisions on the level of any involvement had been taken.
"I think this has got some way to play out," Mr Walsh said. "The stock market is telling Pernod that they should pay more than they are offering right now. If you are a market watcher, which I am, you would say it is going to take a higher offer for Pernod Ricard to prevail."
He added that the company that goes first in such a situation "should have the bravery to go all the way. I am sitting on the fence on this one, and quite an interesting vantage point it is too."
Diageo is in a strong position to support either set of bidders, said Mr Walsh. "We are watching with great interest and we have a good balance sheet. If individual brands came on the market, and I am not going to say which ones, we would be a well-balanced player to help the consortium or Pernod Ricard to help up the bid."
Diageo is said to be paying close attention to Allied's Courvoiser and Maker's Mark bourbon brands, but the company denies it is playing games with its comments.
Pernod Ricard has responded by suggesting that it is in Diageo's interest to spin out the proceedings, but that time is running out.
The French company's bid is to be put before Allied shareholders on July 6, while City watchdog the Takeover Panel has told the Constellation-led consortium to table a firm offer by June 29 or walk away.
