bargian booze alcohol

Bargain Booze owner Conviviality Retail has emerged as a front runner in the £200m sale of specialist wine wholesaler Matthew Clark.

The AIM-listed retailer suspended trading in its shares on Thursday morning following enquiries by The Grocer about its involvement.

With second-round negotiations expected to conclude by the end of July, rivals to Conviviality include trade players such as Heineken, as well as several private equity firms.

“From a synergy point of view, the best fit is Heineken, AB InBev or Coors,” an industry source said. “Buyers have to bring cost synergies to the party to justify the price tag.”

The sale, which is being handled by Rothschild, was still “wide open” City sources added.

Matthew Clark, established more than 200 years ago, is Britain’s biggest beer, wine and spirits supplier serving more than 18,000 UK pubs, restaurants and hotels.

The fast-growing group, which employs 1,450 staff and made pre-tax profits of £17m on sales of £811m in the year to 28 February, also increasingly sells brands to the UK’s major grocers, as well as c-stores, and symbol-group and cash-and-carry customers.

“We have leveraged our unrivalled wine capability to engage food-led operators, and have created a fantastic market position,” Matthew Clark CEO Steve Thomson told The Grocer.

“Our strategy has been to migrate from traditional wholesaling to a full market-service proposition, which has been very well received by suppliers and retailers alike. We have barely started.”

Conviviality currently has a market capitalisation of just over £100m, so any deal would be classed as a reverse takeover under AIM rules given the price Matthew Clark is expected to achieve.

Matthew Clark is owned by pub company Punch Taverns and Australian private equity firm CHAMP, which bought its stake from Constellation Brands in 2011.

The industry source added: “Steve’s done a great job. But Matthew Clark has always made money. It’s more a case of both owners, Champ and Punch, agreeing to sell at the same time. That’s been the real obstacle to a sale in the past.”