B-F, Pernod Ricard End Talks. What About Sazerac?

A couple of weeks ago, while everyone else in the media was assuming Brown-Forman Corp.'s future lay with Pernod Ricard, we asked why the descendants of founder George Garvin Brown would want to sell.

We noted that Brown-Forman's earning performance has been stronger, its balance sheet is stronger and a sale would mean the Brown Family, which holds absolute control over the company's voting stock, would be giving up the core piece of their identity.

Yesterday, in a short statement, Brown-Forman confirmed we were right:

"Brown‑Forman Corporation today announced that the company and Pernod Ricard have terminated discussions regarding a potential business combination, as the companies were unable to reach mutually agreeable terms."

Brown-Forman Class A shares, which hold all the voting rights, fell 11% yesterday, closing at $25.40 on the New York Stock Exchange. Pernod Ricard stock, which is not traded in the U.S., fell 3.08% on the Paris Bourse to 62.30 Euros.

As for the future, the company said, “We intend to create long-term value for all stakeholders by focusing on our strategic and operational priorities. This includes unlocking future growth by expanding our geographic footprint, continuing to build brands that resonate with consumers, and enhancing operational efficiency.”

That sounds to us like it's rejecting any offer from Sazerac Co., too. Sazerac reportedly offered $15 billion to acquire the company. We asked Brown-Forman for confirmation, but they haven't had time to confirm to us.