Stock Spirits Group (LSE:STCK) PLC (LSE:STCK), the second-largest vodka producer in Europe, has agreed to a £767mln takeover offer by private equity group CVC Advisers.
The 377p per share cash offer represents a 41% premium to Wednesday’s closing share price.
“We believe that CVC's support for our existing strategy and the investment that it intends to make in order to grow our business means that this offer will benefit all of Stock Spirits' stakeholders,” said the vodka producer’s chairman David Maloney. “We are therefore unanimously recommending the offer to Stock Spirits shareholders."
UK-headquartered Stock Spirits is a major alcohol producer in the Central and Eastern European sector - with a focus on Poland, the Czech Republic and Italy - and a third of its revenues come from premium brands.
CVC made five separate unsolicited proposals to Stock Spirits over recent months before the recommended £767mln offer.
Stock Spirits has a portfolio of more than 70 own brands and over 70 third-party brands, which are distributed in over 50 markets around the world. Its brands include Żołdkowa, Lubelska, Božkov and Stock Prestige.
"Stock Spirits is a high-quality business with strong brands, established market positions and significant growth potential and we are delighted that our proposal has been recommended by the Stock Spirits Directors," said István Szőke, managing partner at CVC.
“CVC Funds are a long-standing investor in Central and Eastern Europe and we look forward to working with Stock Spirits' management team to help drive its continued development, both by supporting the existing strategy and by investing in inorganic growth opportunities."
Shares in Stock Spirits were up 43% at 384p in mid-morning trading.
"An approach for Stock Spirits is understandable in our view given its leading market position across several European markets, notably in Poland and the Czech Republic, and the potential to generate mid-to-high single digital annual revenue growth across these territories,” said Shore Capital analyst Greg Johnson.
“Despite the premium, we would see a valuation of 13x our 2022F EBITDA and 21x earnings estimates as modest when set against wider peer valuations and the conservative nature of our forecasts.
“It remains to be seen if the bid flushes out counter offers from the industry," he added.