TD Cowen notes that The Wall Street Journal reports that Sazerac, the second largest U.S. distilled spirits company, approached Brown-Forman (BF.A) (BF.B) regarding a potential takeover after the latter previously confirmed that they have held merger talks with Pernod Ricard (PDRDF). The firm, which “would not be surprised” to see other distilled spirits companies express interest as well, thinks a buyer would have to pay a 30%-35% equity premium to get a deal done with complete change of control, which would imply a stock price of $33-$34 per share. The firm has a Hold rating and $30 price target on Brown-Forman.
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