Conviviality Retail (CVR) has suspended trading in its shares following questions from The Grocer about a potential acquisition of one of the UK’s biggest drinks suppliers.
The Bargain Booze owner confirmed this morning in a statement to the London Stock Exchange that it was seeking to acquire Matthew Clark from Punch Taverns and Accolade Wines.
“Conviviality Retail confirms that, following media speculation, is participating in a managed sale process in respect of Matthew Clark (Holdings) Limited which, if successful, would constitute a reverse takeover under the AIM rules,” the statement added. “The company’s shares will therefore be suspended from trading immediately and remain suspended until either these discussions have ceased or an AIM admission document has been published.”
The price tag for Matthew Clark, in a sale process being handled by Rothschild, is thought to be about £200m. Conviviality’s current market cap is just more than £100m with a share price of 155p – 55p above the 100p float price from July 2013.
The Grocer understands the deal process is still “wide open”, with multiple parties from the trade and private equity still in the process and a shortlist and second round bids some weeks away, according to City sources.
Matthew Clark, which has been in business for more than 200 years and now employs 1,450 staff, specialises in the wholesaling of wine but also sells spirits, beers, ciders and soft drinks to about 18,000 pubs across the UK. The group made pre-tax profits of £17m on sales of £811m in the year to 28 February 2015, according to accounts just filed at Companies House.
Listed pubco Punch holds a 50% stake in the group alongside Accolade Wines, backed by Australian private equity firm CHAMP, which bought its 50% of the business from Constellation Brands in 2011.
Conviviality, which publishes its full-year results on Monday (13 July), said it will update shareholders with “further information as appropriate”.