Jose Cuervo primed to join Mexico City stock market

Shares in the newly listed Tequila maker Jose Cuervo are expected to jump on the Mexico City stock market following a highly successful initial public offering.

Jose Cuervo Especial GoldDemand for the shares was more than eight times the allotment with the stock priced 34 pesos per share, at the top of the expected range. The company is known officially not by the brand name of its market-leading tequila brand, but as Becle.

The pricing of the 476.6 million share offer means Becle raised at least $791 million. Add in a technical measure of a 15% “overallotment option”, and the company will have raised more than $900 million.

The listing was twice delayed by uncertainty about the US presidential election.

The prospect of Donald Trump entering the White House sent the peso to record lows and created doubts about the Mexican economy, especially as he has threatened punitive taxes on Mexican imports.

Becle was the first initial public offering in Mexico since Trump was inaugurated.

Analysts believe Cuervo’s strong dollar-based earnings made the listing extremely attractive especially as tequila is not heavily dependent on prices.

With 30% of the global tequila market, the business remains controlled by the Beckmann family, which will remain the majority shareholder. In 2012 they refused to sell the Cuervo brand to Diageo, which held worldwide distribution rights. The then Diageo chief executive, Paul Walsh declined to renew the agreement, saying he wanted only brands he owned or controlled in his portfolio.

As part of the divorce from Diageo, the Beckmanns gained the Bushmills Irish whiskey brand and speculation now centres on where they might spend the newly-raised funds to bolster their spirits portfolio.

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