Brown-Forman, the company behind Jack Daniel's, has rejected a $15 billion takeover offer from privately held Sazerac. This decision comes after Brown-Forman had previously engaged in and then terminated merger discussions with France's Pernod Ricard. Sazerac's offer, initially made in May, proposed $32 per share for both voting Class A and non-voting Class B shares, with an option for the controlling Brown family to roll their equity into Sazerac and gain proportional board representation, as well as a higher dividend than current payouts.
The Brown family, which holds a majority of Brown-Forman's Class A voting shares, stated that Sazerac's proposal does not align with their vision for the company's future. This stance was reiterated by Wolf Pen Branch, a group representing a majority of the Class A shareholders. Despite Sazerac's readiness to improve its offer if Brown-Forman engaged in discussions, the company's board deemed the offer "not actionable." The rejection has led to a further 1% drop in Brown-Forman's share price to $26.56, well below Sazerac's offer.
Sazerac's interest emerged after news broke of Brown-Forman's talks with Pernod Ricard. While both sides were reportedly close on valuation, the Pernod-Ricard merger fell apart over control issues, as the Brown family was unwilling to cede significant influence. The Brown family has run the Kentucky distiller for five generations, and any sale requires their approval. The company is also currently searching for a new CEO following Lawson Whiting's announced retirement. A merger between Brown-Forman and Sazerac would have created a dominant U.S. player, controlling an estimated 18% of the U.S. spirits market and nearly 40% of American whiskey.
