Tequila Billionaires Win Big After Cuervo IPOBy , , and
Cuervo’s share sale is the biggest in Mexico since 2013
Distiller’s stock has soared as much as 8.8% on Thursday
Juan Francisco Beckmann Vidal and Juan Domingo Beckmann -- the heirs to the family that controls tequila giant Jose Cuervo -- are seeing their net worth soar a day after the company carried out Mexico’s biggest IPO in more than three years.
Their combined wealth now totals about $5.9 billion, compared with Bloomberg’s estimate of $3.4 billion prior to the share sale. The surge also reflects a jump in Cuervo’s stock price of as much as 8.8 percent on Thursday, the day after the world’s biggest tequila maker sold about $790 million of shares. The distiller’s $6.3 billion valuation would make it one of the 20 biggest companies on Mexico’s benchmark stock gauge if it were on the index.
The Beckmanns have capitalized on investors’ bullish view of the Mexico City-based company despite growing tensions over trade between Mexico and the U.S. in the wake of President Donald Trump’s election. Cuervo has been able to overcome concerns about a possible border tax and a weakening Mexican currency because it gets more than 60 percent of its revenue from the U.S. and Canada while the bulk of its costs are in pesos.
“It’s such an iconic company and has such a dominant market share especially in tequila,” said Bradford Jones, who manages the Latin American Opportunities Fund at Sagil Capital in London and bought Cuervo shares during the initial public offering. “People recognize the risks in potential border taxes and other measures, but they expect Jose Cuervo will be able to avoid some of that.”
The IPO, which is said to have been 8 times oversubscribed, leaves the Beckmanns with an 86.7 percent stake in Cuervo excluding green-shoe options, according to the offering prospectus. Their net worth also includes some Chicago real estate holdings and an investment portfolio, data compiled by Bloomberg show. Chairman Juan Francisco is the father of Cuervo Chief Executive Officer Juan Domingo, and their family has run the company for 250 years.
— With assistance by Andrew Heathcote, Jack Witzig, and Robert Lafranco