UB to unveil Taittinger plan this week

The Vijay Mallya-owned UB group will announce this week a plan aimed at addressing concerns raised by the French industry and labour bodies over its bid for the champagne company, Taittinger.

UB has emerged the highest bidder for the world's sixth-largest champagne company, though industry bodies in France are averse to selling the company to a non-French group, according to an investment banking source.

The source said UB may formally announce its bid on Taittinger in the next two to three days.

The source said UB had clearly outbid its closest bidder, French regional bank Credit Agricole du Nord-Est, by pegging its bid at $752 million (nearly Rs 3,000 crore). Credit Agricole du Nord-Est, the regional branch of Credit Agricole SA, is learnt to have offered $656 million.

In addition to the two bidders, Spanish wine company Freixenet SA is also in fray for the champagne house, which Starwood Capital has put on the block, they said.

However, what queers the pitch for UB is that its bid covers both Taittinger and its Californian winery, Cearneros, while other players have bid only for the champagne company. Also, selling the champagne firm to a non-French company may stir a national outcry, the source pointed out.

A UB group spokesperson declined to comment on the development.

Mallya's bid may face the same rough weather as LN Mittal's attempt to acquire Arcelor. However, there is a key difference between Mallya's bid for Taittinger and Mittal's bid for Arcelor. UB group had put in a bid after Starwood Capital had put Taittinger up for sale, while Mittal Steel offered an unsolicited bid.

In fact, the Taittinger family had sold the company to the American firm, Starwood, last year kindling a similar national outburst.

Credit Agricole du Nord-Est has teamed up with some members of the Taittinger family, led-by Anne-Claire Taittinger, who was running the family holding before it was sold to Starwood Capital for Euro 2.6 billion last year. Starwood Capital short-listed six candidates from 40 in mid-May.

Investment funds Butler Capital Partners and CVC Capital Partners were among the private equity houses which had expressed interest in Taittinger. Butler Capital Partners, however, did not submit an offer.

Another champagne company, Thienot, had put in a binding offer.

Mallya aimed at acquiring Taittinger to come close to the world's largest spirits company Diageo in the stacking order. At present, the UB group is the second largest spirits producer in the world.

After announcing a brand ambassdor for his Romanov vodka, Mallya had said last week the Taittinger acquisition would give him a network and distribution channel in all over Europe. Taittinger sells around 4.5 billion bottles of champagne and wine a year.