Former boss interested in buying back Whyte & Mackay from Diageo-Reuters

(Reuters) – Former Whyte & Mackay Chief Executive Vivian Imerman is interested in buying the whisky assets back from Diageo, his investment firm said on Friday.

Diageo may be forced to sell most of Whyte & Mackay’s whisky assets to address competition concerns arising from its July acquisition of a controlling interest in India’s United Spirits (UNSP.NS: Quote, Profile, Research, Stock Buzz).

Imerman, chairman of investment firm Vasari and once dubbed “The Man from Del Monte” after leading a turnaround at the tinned fruit company, sold Whyte & Mackay to United Spirits in 2007 for 595 million pounds ($972.62 million).

Vasari said in a statement on Friday that it would be interested in buying back the whisky assets should Diageo be forced to sell them.

“Whyte and Mackay would make an important addition to the portfolio of spirits and beer businesses in Africa and Asia where Mr Imerman has been concentrating his efforts through his company Vasari,” the firm said in an emailed statement.

“The W&M brand would be complementary to the strategy of acquiring and growing businesses in these regions to take advantage of rapid consumer growth.”
Diageo declined to comment.

In July Diageo took a 25 percent stake in United Spirits, part of industrialist Vijay Mallya’s empire and owner of Whyte & Mackay, which sells a branded Scotch whisky but has a bigger business supplying bulk whisky that other drink makers brand as their own.

However, the British competition authority said on Monday that Diageo’s lower-end Bell’s whisky competes with Whyte & Mackay’s own-label and branded whisky and that the merger may lead to “a substantial lessening” of competition.

Diageo, the world’s biggest spirits maker, said on Monday that it would assist Britain’s Office of Fair Trading with its evaluation of the United Spirits deal and that a further announcement would be made in due course.

Diageo has offered to sell Whyte & Mackay’s Invergordon, Jura and Fettercairn grain distilleries, which account for the bulk of its blended Scotch. It would like to keep the smaller Dalmore and Tamnavulin malt distilleries.

Because the Whyte & Mackay brand is not very strong, it is unlikely to fetch as high a premium as other spirits sales, said Bernstein analyst Trevor Stirling.
“There are very few precedents for this,” Stirling said.

Based on his estimate of Whyte & Mackay’s earnings and recent deal multiples, Stirling said the company could be worth roughly 350 million to 600 million pounds ($566 million to $971 million).