Fridman-Led Takeover Bid for Vodka Maker CEDC WithdrawnBeth Jinks
A consortium that was competing with Russian billionaire Roustam Tariko for control of Polish vodka producer Central European Distribution Corp. withdrew its takeover offer today.
Fellow billionaire Mikhail Fridman’s A1, CEDC shareholder and bond investor Mark Kaufman and SPI Group, which sells Stolichnaya vodka, each announced their were withdrawing in separate e-mailed statements today. CEDC acknowledged the alternate proposal had been withdrawn in a statement today, and said it hadn’t received any other offers.
Kaufman decided to withdraw after assessing CEDC’s demands for a higher restructuring bid, their recent financial results and the costs of the group’s proposed U.S. bankruptcy filing, Cyril Benoit, a Paris-based banker advising the investor, said by phone today. Benoit said he couldn’t comment on why A1 and SPI walked away.
The group’s pre-packaged bankruptcy proposal competed with a restructuring takeover offer from Tariko’s Roust Trading, which CEDC reiterated today it continues to back. The Warsaw-based company, whose shares sank 50 percent in New York last year amid management changes and faltering sales, was unable to repay $258 million of notes due March 15. CEDC earned two-thirds of 2012 sales in Russia, where it produces Zelyonaya Marka, Parliament and Zhuravli vodka. Tariko owns the Russian Standard vodka company.
The A1 consortium is affiliated with Russia’s OAO Alfa Bank. CEDC acquired Kaufman’s Russian liquor importer Whitehall Group in stages between May 2008 and February 2011. Whitehall imports drinks including the Hennessy, Dom Perignon, Moet & Chandon and Veuve Clicquot brands.
Creditor votes on whether to accept Tariko’s plan are due April 4. So far holders of more than half of the principal amount due on 2016 bonds and 73 percent of 2013 bonds have backed the Tariko plan, CEDC said today.
As a bondholder, Kaufman won’t vote in favor of Tariko’s plan, said Benoit, his adviser. Kaufman objects to Tariko’s proposals including the idea that some junior creditors would be paid when all senior holdings haven’t been repaid, Benoit said.
The counteroffer group withdrew their bid one day after their lawyers and bankers held separate calls with bondholders and media to discuss the merits of their plan.
CEDC shares rose 11 percent to 33.5 cents in New York. The stock is down 85 percent this year.