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Constellation mulls Allied Domecq bid

Offer would rival Pernod's $14.2b buyout proposal

LONDON -- US winemaker Constellation Brands Inc. said yesterday that it is considering making an offer to rival last week's $14.2 billion buyout proposal for British liquor company Allied Domecq PLC from French distiller Pernod Ricard SA and US consumer products company Fortune Brands Inc.

Constellation, the world's largest winemaker, with brands like Almaden, Inglenook, Hardys, and Ravenswood, said it is ''at an early stage of evaluating its options with a number of potential partners" about a possible offer for Allied Domecq.

''There is no certainty that this process will lead to an approach being made to the company," the Fairport, N.Y., company, which also owns brands such as Corona Extra and St. Pauli Girl beers, said in a statement to the London Stock Exchange. It said the statement was prompted by news media and analyst speculation about its intentions.

Allied last week recommended that shareholders accept a $14.2 billion takeover offer from its smaller, Paris-based rival Pernod in a deal that would make the combined entity the second-largest liquor company and a more serious challenger to world leader Diageo PLC, whose brands include Guinness stout and Johnnie Walker Scotch.

Allied has agreed to pay Pernod a $71 million fee if a competing offer made within six months of last week's announcement is successful.

Allied shares increased 1.3 percent to 671.5 pence ($12.83) on the London Stock Exchange, while Pernod shares dropped 1.1 percent to 122.40 euros ($158.90) on the Euronext Exchange in Paris. Allied also owns restaurant brands Dunkin' Donuts, Baskin-Robbins, and Togo's sandwich shops.

To appease regulators and help with finances, Pernod plans to sell some of the brands it acquires from Allied to Fortune, a US liquor, sports equipment, and household products company, for about $5.4 billion.

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