City & Corporate: Brown-Forman appoints Smithfield for Allied bid

Brown-Forman, the drinks firm whose brands include Jack Daniel's and Finlandia, has drafted in Smithfield as it prepares to back a joint bid for rival Allied Domecq.

Brown-Forman is part of the Constellation Brands-led consortium that is planning a bid to rival Pernod Ricard's £7bn agreed takeover of Allied. The brands up for grabs include Beefeater gin and Tia Maria.

The move follows Constellation's appointment of M: Communications at the end of last month and increases the likelihood of a bidding war.

Last Friday, Allied said it had received a proposal from the consortium, which is also backed by private equity groups Lion Capital Holdings and Blackstone Group.

Allied said the proposal was 'highly conditional, being subject to considerable further due diligence, confirmation of financing and a number of other significant conditions'.

It added that it was 'too early to ascertain' whether a firm offer would result.

Constellation would need to bid more than 700p a share to beat Pernod's offer.

Constellation and Brown-Forman are thought to be particularly interested in Allied's US-based brands, such as Kahlua liqueur and Sauza tequila. The private equity groups are thought to be eyeing up European brands such as Ballantine's.

Pernod, whose brands include Havana Club, is represented by retained agency Citigate Dewe Rogerson. Allied's retained agency is Cardew Group.

Fortune Brands, which owns Jim Beam whiskey, has hired Finsbury to handle PR around its role as backer to the Pernod bid.

Diageo, the world's largest drinks group, said last month that it was looking at acquisition opportunities. Market commentators have interpreted this as indication that it is weighing up its own bid for Allied. Diageo's retained financial comms agency is Brunswick.

SPI Group, which owns Allied-distributed Russian vodka brand Stolichnaya, has hired Tulchan Communications. The group has appointed HSBC as its financial adviser.

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