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View Full Version : Is Wild Turkey on the Chopping Block?



cowdery
12-12-2008, 15:50
Published sources are reporting that Pernod Ricard will gladly sell the Wild Turkey bourbon brand and its Lawrenceburg, KY, distillery, if a suitable buyer can be found. They're trying to raise cash to make their recent acquisition of Absolut Vodka go down more smoothly.

According to at least one published report, Wild Turkey is at the very top of the "for sale" list.

More here. (http://chuckcowdery.blogspot.com/2008/12/wild-turkey-for-sale.html)

MikeK
12-12-2008, 15:53
Sweet! I must go buy a lottery ticket...

OscarV
12-12-2008, 17:01
OK all y'all SB.com'ers out there,... let's pass the hat and buy this Turkey!

I'm serious.

Attila
12-12-2008, 17:38
None of those 15 core brands are ever on my shopping list.

funknik
12-12-2008, 17:50
OK all y'all SB.com'ers out there,... let's pass the hat and buy this Turkey!

I'm serious.

I wonder how much it's worth...let's do it!

Josh
12-12-2008, 17:54
Put me down for five dollars.

kickert
12-12-2008, 18:39
If someone buys it, they can sell job opportunities Blagojevich-style. I bet you get top dollar for one of the whiskey tasting positions.

Thesh
12-12-2008, 18:45
I'll go in for $20.

Dramiel McHinson
12-12-2008, 18:57
Maybe we'll get lucky and a Non-Beam American company will buy it. Darn! I sure hate to see the Bird go extinct.

SBOmarc
12-12-2008, 19:00
Whatever cash I have.

That won't be nearly enough.

Calling my Congressman to determine how much we could get for a bailout.

ILLfarmboy
12-12-2008, 19:39
....I sure hate to see the Bird go extinct.


Dear God.. Could it come to that?

Jazzhead
12-12-2008, 20:52
I don't think so. Pernoud needs to raise cash because of another acquistion (Absolute), so it stands to reason that it's selling something that has value. WT is an iconic brand. Their whiskey is delicious. I can't imagine a scenario where the brand goes extinct. At greater risk is the distillery, if the buyer is also a distiller with excess capacity.

cowdery
12-12-2008, 21:02
Perhaps my endangered species crack was overly-clever. Wild Turkey may be sold to another parent company, that's all. Its existence is not in jeopardy.

Hondo
12-13-2008, 06:07
Perhaps my endangered species crack was overly-clever. Wild Turkey may be sold to another parent company, that's all. Its existence is not in jeopardy.

WT101 is one of my favorites... I sure hope nothing changes the flavor profile of this fine bourbon.

funknik
12-13-2008, 06:14
WT101 is one of my favorites... I sure hope nothing changes the flavor profile of this fine bourbon.

I really think the Wild Turkey brand, like Chuck says, is SO iconic with a devout following -- whoever picks it up will want to keep it and its clientele intact.

Hondo
12-13-2008, 06:57
I really think the Wild Turkey brand, like Chuck says, is SO iconic with a devout following -- whoever picks it up will want to keep it and its clientele intact.

I am sure that you are right... however I think I might use this as an excuse to bunker a case or two.

My wife has put her foot down and said that I absoulutely can't buy anymore burbon until I drink what I have or else. I'm sure gona miss her... :grin:

Dramiel McHinson
12-13-2008, 17:04
Perhaps my endangered species crack was overly-clever. Wild Turkey may be sold to another parent company, that's all. Its existence is not in jeopardy.

Whew! Thanx Mr. Chuck. Perhaps I panicked too soon. I was bloviating in another post about all the distillery closings and why some of the very best scotch whisky and bourbon distilleries of yester-year were shut down. Having whipped my self into a frenzy over that, I just completly had a melt down over WT going away. I feel better now. The glass of WT Kentucky Spirit single barrel helped.

GreggB
12-13-2008, 21:17
Calling my Congressman to determine how much we could get for a bailout.

Yeah, WT is too big to fail.

smokinjoe
12-14-2008, 12:31
For all of the reasons mentioned here, I don't think there is any chance that the Wild Turkey "brand" will go away in any sale. But, as history has shown us many, many, times in this industry, the product inside the bottle is definitely NOT off-limits to change, in such a circumstance.

VERITAS
12-14-2008, 17:51
Maybe we'll get lucky and a Non-Beam American company will buy it. Darn! I sure hate to see the Bird go extinct.

My money is on Skyy Spirits... they have a decent whiskey portfolio already and have been looking for a bourbon to round out their offerings.

kickert
02-04-2009, 12:09
Hey Folks,

I just got back from a trip to WT. I have some inside information on this. WT is in fact up for sale after their parent company bought Absolute and wanted get some cash back in their account.

Right now there are two companies looking to purchase WT. One is visiting the plant next week and the other in a few weeks. The first should be no surprise: Diageo. The second is Proximo spirits, which bottles 3 Olives Vodka.

I thought you all would be interested in this information.

Josh
02-04-2009, 12:15
Thanks for the info Kickert. Diageo...that's a possibility that won't make anybody happy. I'm currently re-reading your signature...

kickert
02-04-2009, 12:36
Thanks for the info Kickert. Diageo...that's a possibility that won't make anybody happy. I'm currently re-reading your signature...

I tend to agree. Although, if Diageo buys WT, they would certainly be doing it for the distillation infrastructure.

doubleblank
02-04-2009, 12:51
I understand BT gave them a quick look too but felt Barton was the better fit for BT's needs........and asking price.

Randy

funknik
02-04-2009, 13:05
So should we start hoarding the Turkey or what? Frozen turkeys everywhere.

The Boozer
02-04-2009, 13:30
Let me see here:
Old shopping list: Old Weller 107
Knob Creek

New shopping list: Old Weller 107
Knob Creek
WT 101 - 1 case
TJ

ThomasH
02-04-2009, 13:35
I would rather not see Diageo get WT. I'm not happy with them keeping SW mothballed. However, if they do buy it, maybe they in turn would divest SW and someone else would jump start the Stitz again. Whoever buys WT, they most certainly should up production and return the 12yr back to American soil!

Thomas

funknik
02-04-2009, 13:45
Let me see here:
Old shopping list: Old Weller 107
Knob Creek

New shopping list: Old Weller 107
Knob Creek
WT 101 - 1 case
TJ
:slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin: :slappin:

fishnbowljoe
02-04-2009, 14:40
Boozer, I agree with Andy. That's funny. I don't care who you are. Joe

Attila
02-04-2009, 15:01
It'd be nice if there was an MBO and it went independent.

Unfortunately, MBO-financing is rather scarce in this market.

Or maybe Warren Buffet can retire from his day job, invest all the loot his hasnt already given away in WT expansion and restarting SW.

A man can dream, cant he?

Virus_Of_Life
02-04-2009, 15:21
When I first heard about this weeks ago I fantasized and can't help but do some more. I need a new career and would be glad to relocate to Lawrenceburg if anyone happens to hit a $300M lottery and wants to put in an offer!

cowdery
02-04-2009, 16:22
I'm not sure why a sale to Diageo would be a disaster. How is Pernod a better owner than Diageo? It's for sale because it's not a priority for Pernod? Does the fact that Diageo is interested mean it would be a priority for Diageo? Possibly.

Diageo needs the production facility as much as it needs the brand, maybe more.

I would be more worried about Proximo, mainly because they're an unknown. here (http://www.beverageworld.com/content/view/35362/) is a Beverage World profile. It's a lengthy puff piece that doesn't answer a couple of crucial questions. Who is funding them? Do they own any production facilities?

Looking at their portfolio, I'm guessing they do not own any production facilities. I have no idea who is funding them, but I have to believe Wild Turkey would be a big bite and Pernod isn't going to carry the note. Maybe they would try to keep the brand but sell the distillery to someone like Angostura. Just speculating here.

sailor22
02-05-2009, 07:40
Diagio didn't do anything good for Rum drinkers when it bought Zacapa recently. Price went up, distribution changed - it is everywhere now - the juice in the bottle changed - and not for the better. It has changed from a complex sophisticated Rum to a sweet drink.

I would hate to see WT dumbed down similarly.

Virus_Of_Life
02-05-2009, 09:58
Diageo needs the production facility as much as it needs the brand, maybe more.

I would be more worried about Proximo, mainly because they're an unknown. here (http://www.beverageworld.com/content/view/35362/) is a Beverage World profile. It's a lengthy puff piece that doesn't answer a couple of crucial questions. Who is funding them? Do they own any production facilities?

Looking at their portfolio, I'm guessing they do not own any production facilities. I have no idea who is funding them, but I have to believe Wild Turkey would be a big bite and Pernod isn't going to carry the note. Maybe they would try to keep the brand but sell the distillery to someone like Angostura. Just speculating here.

Chuck those things you've said worry me more than anything else I had read yet. I guess just because I didn't really consider Wild Turkey as we know it today going away, which it seems to me you are speculating regardless of the outcome.

Please keep us up on the news as you learn it.

Josh
02-05-2009, 10:21
I'm not sure why a sale to Diageo would be a disaster. How is Pernod a better owner than Diageo? It's for sale because it's not a priority for Pernod? Does the fact that Diageo is interested mean it would be a priority for Diageo? Possibly.

I would be more worried about Proximo, mainly because they're an unknown. here (http://www.beverageworld.com/content/view/35362/) is a Beverage World profile. It's a lengthy puff piece that doesn't answer a couple of crucial questions. Who is funding them? Do they own any production facilities?

Looking at their portfolio, I'm guessing they do not own any production facilities. I have no idea who is funding them, but I have to believe Wild Turkey would be a big bite and Pernod isn't going to carry the note. Maybe they would try to keep the brand but sell the distillery to someone like Angostura. Just speculating here.

First of all, I have no idea what the second sentence in the last paragraph means.

Second, I don't know that a sale to Diageo would necessarily be a disaster, but what worries me is their history of being fickle and making what seem to be asinine decisions, (such as the idea to focus on RY as a global brand) and their history of shutting down distilleries, rightly or wrongly. That is what makes me nervous, and I'm guessing that's what is making others nervous too.

As for Proximo, they are very much an unknown, but even from the puff-piece it seems like they are serious about getting a "full portfolio" of liquor. Surely this former B-F executive Michael Cheek mentioned would realize the value of having a whiskey with a big following in the portfolio. And if they are serious, then having a big distillery which is in the process of being updated (I think?) would be an asset. We all know what Diageo did with a certain newly renovated distillery. If HH hadn't burned, it might be mothballed itself right now.

So no, it's not necessarily the end of the world. It is just cause for concern, imo, because of Diageo's history.

cowdery
02-05-2009, 12:03
Michael Cheek is no longer involved with Proximo. That's in the article.

The meaning of the paragraph you didn't understand is that I can't imagine where a company as small as Proximo would get the money to buy Wild Turkey and since Pernod's reason for selling is to get cash to reduce its debt, Pernod will not be looking for a deal for anything other than cash. They're not going to, in effect, finance the deal for Proximo.

Sazerac said the price of the Barton deal was more in line for them than the price for Wild Turkey. The deals are very different, in terms of the asset mix, but the Barton deal was valued at $334 million, leading one to suspect that Wild Turkey will go for considerably north of that. I don't see where Proximo gets that kind of money.

One thing that should be reassuring is that Wild Turkey is not a distressed property. It's being sold because it's valuable and the current owner needs the money. It's not being sold because the current owner wants to unload it. That bodes well for whoever buys it leaving it well enough alone.

doubleblank
02-05-2009, 12:26
I agree with Chuck that the price tag on Turkey should be considerably higher than Barton because of the assets involved (but that is just speculation as we haven't seen detailed terms of the Barton deal). But Pernod is a big company who knows how to buy and sell brands/assets. If Proximo is actually getting to look at the Bird, then my guess is that they had to show some type of financing "muscle" just to get in the door. Pernod wouldn't waste their time with tire-kickers. That's just standard practice when doing multi-million dollar deals.

Randy

kickert
02-05-2009, 12:42
According to the person I talked to, WT has always made a profit. With that in mind, I can't imagine anyone would want to mess with it too much. I have a feeling Jimmy Russell will keep doing his thing.

It makes sense for Diageo to buy it then they have a bourbon distillery of their own which could supply Bulleit.

funknik
02-05-2009, 13:29
According to the person I talked to, WT has always made a profit. With that in mind, I can't imagine anyone would want to mess with it too much. I have a feeling Jimmy Russell will keep doing his thing.

It makes sense for Diageo to buy it then they have a bourbon distillery of their own which could supply Bulleit.
Bulleit could only get benefit from WT juice, in my opinion.

cowdery
02-05-2009, 14:00
I agree with Chuck that the price tag on Turkey should be considerably higher than Barton because of the assets involved (but that is just speculation as we haven't seen detailed terms of the Barton deal). But Pernod is a big company who knows how to buy and sell brands/assets. If Proximo is actually getting to look at the Bird, then my guess is that they had to show some type of financing "muscle" just to get in the door. Pernod wouldn't waste their time with tire-kickers. That's just standard practice when doing multi-million dollar deals.

Randy

And I agree with you, Randy, which makes the question that much more compelling. From whence does Proximo's capital come?

Constellation, as a public company, announced the value of its sale to Sazerac as $334mm. They did receive a shopping cart full of brands, but none of them household names like Wild Turkey.

I don't know if I mentioned this here before, but a hack from Drinks America (Trump Vodka, Whiskey River Bourbon) implied on my blog (http://chuckcowdery.blogspot.com/2008/12/wild-turkey-for-sale.html) that they are in the hunt for Wild Turkey too, but the same question applies. Where would they get the money?

fussychicken
02-05-2009, 16:57
Constellation, as a public company, announced the value of its sale to Sazerac as $334mm. They did receive a shopping cart full of brands, but none of them household names like Wild Turkey.

So lets take a couple of random data points of recent big sales:
Absolut sold for $9 Billion in 2008
Constellation sold everything for $334 million in 2008
Bushmill's went for 295 million EUR in 2005
Herradura Tequlia went for $776 million in 2007
I couldn't find out exactly how much Fortune bought Maker's for, but it sounds like it was part of a basket of stuff that was 2.8 Bil. So lets estimate Makers at $600 - $1 Billion.So what will Wild Turkey go for? Oh, you want my guess? Pernod probably wants $1.5 billion, but will at best probably only get $1 Billion in today's economy. I really think it is a good buy though. Wild Turkey already has a foothold in export markets, and has already developed some premium brands. Two things that seem to be very important in today's spirits world.

Virus_Of_Life
02-05-2009, 22:51
I don't know if I mentioned this here before, but a hack from Drinks America (Trump Vodka, Whiskey River Bourbon) implied on my blog (http://chuckcowdery.blogspot.com/2008/12/wild-turkey-for-sale.html) that they are in the hunt for Wild Turkey too, but the same question applies. Where would they get the money?

Just a thought, if the name Trump is attached to their Vodka wouldn't it be possible he's somehow tied to the company?

A quick search also turned up the late Paul Newman, Willie Nelson, Kid Rock and Dr. Dre along with Trump as their alleged partners. That's some pretty serious fire power and capital if true.

http://blog.themavenreport.com/?p=2664

http://www.kidrock.com/news/2008/09/22/drinks-partners-with-icon-kid-rock-for-beer-launch/

I'd be all for seeing Kid Rock promoting Wild Turkey, they'd fit together like they were meant to be!

spun_cookie
02-05-2009, 23:22
I'd be all for seeing Kid Rock promoting Wild Turkey, they'd fit together like they were meant to be!

That or Game Cock, Cock of the Walk, and Dumb as a box on the Rocks ...

wadewood
02-06-2009, 05:45
I think Diageo is the likely buyer. Pernod wants the most value from this sale. I always helps get a higher bid when you know others are also interested. So, Pernod has a few other companies "kick the tires". They are playing Diageo.

Josh
02-06-2009, 07:17
All this speculation on money, etc. is interesting, but I what I'm concerned about is the whiskey. I just don't see how a sale to Diageo is better for the whiskey than Proximo, Cheeks or no Cheeks.

Just because someone pays a lot of money for something doesn't mean once they get it they're going to leave it alone. If I'm Diageo, why do I want an American distillery? What good will that do me? I used to have two of them, both of which I dumped. I've got distilleries elsewhere. I already contract my high-rye bourbon out and that's doing fine. Why would I want to compete with myself? If I do buy it, I might draw upon my history of marketing blunders and committee thinking and make a number of ill-advised changes to the brand and drive it into the ground.

Proximo is a relatively young company. As others have stated, they must be getting some pretty big backing from elsewhere. But wherever it's coming from, Wild Turkey would fit into their portfolio quite nicely. It would give them bourbons and ryes and a brand with a well-established image. They would have less motive, imo, to change anything since they're new to the game and WT is a profitable enterprise. Now if the backers get antsy somewhere down the line, I could see them making changes to the product, but their backers must have a lot of confidence in them if they're going to put up the money for this deal.

So buying WT seems to make more sense to me for Prox than it does for Diageo, and it seems like there is less chance of changes to the juice if Prox owns WT. But I'm just a humble drunk, what do I know?

barturtle
02-06-2009, 08:13
Just because someone pays a lot of money for something doesn't mean once they get it they're going to leave it alone. If I'm Diageo, why do I want an American distillery? What good will that do me? I used to have two of them, both of which I dumped. I've got distilleries elsewhere. I already contract my high-rye bourbon out and that's doing fine. Why would I want to compete with myself? If I do buy it, I might draw upon my history of marketing blunders and committee thinking and make a number of ill-advised changes to the brand and drive it into the ground.

Actually they do still own at least two American distilleries, S-W and Dickel.

Josh
02-06-2009, 08:15
Actually they do still own at least two American distilleries, S-W and Dickel.

I stand or sit corrected. I should have said operating distillieries. Which still leaves Dickel of course.

barturtle
02-06-2009, 08:21
So lets take a couple of random data points of recent big sales:
Absolut sold for $9 Billion in 2008
Constellation sold everything for $334 million in 2008
Bushmill's went for 295 million EUR in 2005
Herradura Tequlia went for $776 million in 2007
I couldn't find out exactly how much Fortune bought Maker's for, but it sounds like it was part of a basket of stuff that was 2.8 Bil. So lets estimate Makers at $600 - $1 Billion.So what will Wild Turkey go for? Oh, you want my guess? Pernod probably wants $1.5 billion, but will at best probably only get $1 Billion in today's economy. I really think it is a good buy though. Wild Turkey already has a foothold in export markets, and has already developed some premium brands. Two things that seem to be very important in today's spirits world.

Here's a question:

What all did each of these sales include? Not just in brands, but in equipment and real estate?

The Constellation sale included a distillery with a bottling line and a second bottling line in Owensboro. plus warehousing in who knows how many places.

Would a WT sale even include one bottling line, since they don't bottling at the distillery anymore, does that equipment even exist still? How much warehousing do they own v. rent? Would all the contracts that have been signed for the expansion cut down on the value?

The Boozer
02-06-2009, 10:45
These posts are really starting to make me worried.:bigeyes:

Revised new shopping list: I'm going need two cases of WT 101.

TJ

cowdery
02-07-2009, 13:28
I was wondering too if any bottling equipment is left at Lawrenceburg. I don't know but my guess would be no.

I'm not sure where Diageo is doing its bottling now for any of its U.S.-made spirits products. Canada?

As for Proximo, Trump is notorious for never investing his own money in any of the projects that bear his name. Likewise all of the rest of the celebs in Drinks America's stable. That's not how it works. It's just a licensing/sponsorship deal for the celeb. They don't put any money in it. At most, they might take some of their fee in stock.

The main thing that worries me about a Proximo is that if they are too leveraged in making the acquisition, they might be forced to go for some quick cash and hurt the brand in the process. The concerns about Diageo are well-founded too. The difference is that Diageo isn't much different from Pernod, the current owner. That has been my sole point on that.

ILLfarmboy
02-07-2009, 14:31
The brand suffering is a concern I have. Wild Turkey, in my opinion has let 101 slip about as far as they dare. Or at least as far as I care to have it slip. Releases like Kentucky Legend are only ever one off bottlings. RR101 was replaced with what I think is an inferior product at a lower proof. I haven't bought a bottle for a couple years but I have heard other posters exclaim that WTKS has tasted a bit young as of late. I was hoping the trend would be reversed at some point. I was hoping WT would release some age stated 8, 10 or 12 year stuff to the domestic market, at least on an annual basis like BT does with the Antique Collection.