Mallya: Dropping out

Mumbai, May 29 (Agencies): United Breweries, the world’s third largest spirits group, today said it had pulled out of the race to acquire French champagne major Taittinger after French bank Credit Agricole, in conjunction with the Taittinger family, tabled a 10 per cent higher bid for the brewery.

A spokesperson for the UB group, which had valued Taittinger at Rs 3,000 crore, said, “We have pulled out of the bid, as a French company (Agricole) increased its bid by 10 per cent than the valuation put by us.”

The development comes amid reports of resistance from the workers’ council of Champagne Taittinger, which was acquired by US-based Starwood Capital in July last, to any takeover attempts by non-French bidders.

Market sources said Credit Agricole is believed to have offered Rs 310 crore more than what UB had quoted and is close to clinching the deal.

“A French company is going to buy Taittinger at a crazy price. The UB group evaluated the company and made a reasonable and practical bid of around Rs 3,000 crore. The rival bidder, it is learnt, offered 10 per cent more than that.

“UB opted out of the race as it was not considered practical to raise the bid amount,” a market source said.

The Vijay Mallya-promoted UB was among the highest bidders and had vowed to maintain the management, jobs and suppliers even after taking over Taittinger ? the world's ninth largest champagne producer, with an annual sales of 4.5 million bottles.

Mallya had, last week, said a successful bid for Taittinger would give him the chance to sell his products using the French firm's distribution network.

UB’s share closed down by Rs 20.7 or 1.42 per cent at Rs 1,440 in a flat market.

Meanwhile, Credit Agricole and members of the Taittinger family are in advanced talks over buying back the family’s champagne brand from Starwood.

Starwood said late on Sunday it was negotiating with Credit Agricole du Nord Est for a possible deal.

A Starwood spokeswoman said Credit Agricole was working on how to finance a possible offer in conjunction with the Taittinger family for the champagne firm, whose roots date back to the 18th century.