Codorníu rejects takeover bid from Carlyle Group
Cava producer Codorníu has rejected an offer from US investment fund the Carlyle Group to take a majority stake in its business, but is open to an approach from a potential minority partner.
Codorníu cellars
Codorníu rejected an offer for a majority stake in the company by Carlyle last week. The Carlyle Group most recently bought Australian wine giant Accolade for AU$1 billion (£548 million), meaning that the value of the company has more than trebled since 2011, when it was bought by former owners Champ.
While its advances of a takeover bid for Codorniu were passed over, the Cava producer has said that it is open to a minority stake partner.
Some of the company’s shareholders intend to sell their stakes, prompting Codorníu to look toward seeking an external investor.
“A reorganization that would be carried out to give exit to some shareholders members of the family, who wish to undertake new personal and professional projects,” the producer said in a statement given to the drinks business.
“Currently, the shareholder of Codorníu is made up of 216 members of the family. With the aim of consolidating and giving continuity to the strategy of the group focused on the construction of value and prestige brands, the resulting family agreement would ensure, reinforce and consolidate the marked strategic plan, the international vocation and the leading position of each of the wineries that make up the group in the different markets.
“It will also help in the changes that are taking place in its corporate governance with the incorporation of a new CEO and a business and strategy oriented advisory board, made up of independent external.”
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Codorníu has been based in the town of Sant Sadurní d’Anoia in Alt Penedès in its entirety since 1551, and in reported revenue of €236m in the year to June 2017, and is expected to achieve and EBITDA of around €30m and profits of €11m by the end of this financial year.
The rejection of Carlyle’s bid follows the sale of fellow Cava producer Freixenet to German sparkling wine company Henkell for €220m for a 50.7% stake in March.
Freixenet and Codorníu are among the thousands of businesses that have moved their legal headquarters out of Catalonia after an independence movement led to political confrontation between Barcelona and Madrid.
The parent company of Codorníu Raventos, Unideco, approved the transfer of the producer’s legal business to Haro in La Rioja, where it also owns Viña Pomal, saying in a statement that the decision was based on, “the political and legal uncertainty in which Catalonia is plunged and with the aim of guaranteeing the interest of its workers and customers.”
It also clarified in a statement that: “The company will maintain its current operating structure across its production facilities and warehouses, as well as all of the jobs in work centres.”
The curse of family owned companies when the shareholding gets spread too widely and there are too many shareholders who have no long term interest in the business. Seems to me Carlyle should focus on absorbing Accolade successfully into their group befoe buying anyone else. We have just witnessed the spectacular collapse of Conviviality that grew rapidly and collapsed even faster. We don’t need another one of those thank you!
Hi Charles, surely Cordornui issues run a lot deeper commercially with more and more consumers buying value Prosecco from the supermarkets and the on trade pumping out draught Frizzante by the gallons. Has their mistake been to take on the lower end of the market who predominantly use tank method, when they should have been challenging the secondary fermentation Champagne houses who are always resolute on premium quality and price, no matter how poor the harvest. If you have an established business since 1551 surely you shouldn’t bail out so readily. Clearly, their business has survived all manor of historical events, NO……don’t tell me it’s Brexit related! I have always been a big Cordornui fan and would be sad to see yet another family business having to sell out.