LOS ANGELES, Oct. 20 (UPI) -- The world's largest vintner is offering more than $1 billion to buy California's Robert Mondavi wine company.
Constellation Brand's $970 million cash bid does not include debt assumption, which would raise Mondavi's value to $1.3 billion, the Los Angeles Times reported Wednesday.
The offer represented a 37 percent premium over the closing market price of Mondavi's Class A shares as of Oct. 11, the day before the confidential proposal was made, said Constellation chief executive Richard Sands.
Constellation's aggressive offer was designed to preempt other rivals from starting a bidding war and to encourage Mondavi's board to delay the planned sale of its premium wine brands and vineyards.
A spokesman for Constellation said the sale of any luxury assets would diminish the value of the entire company.
One analyst said a merger of the two vintners would give the combined company assets in Australia, Europe, South America and North America and control of some 18 percent of California wine shipments, second only to industry leader E&J Gallo Winery, which controls about 27 percent of the market.
