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SPI, Partners Considering Counterbid To Tariko’s Offer For CEDC

March 15, 2013

Days after troubled vodka producer Central European Distribution Corp. endorsed a restructuring of its business to be led by Russian Standard chairman Roustam Tariko, Shanken News Daily has learned that Stolichnaya owner SPI Group is contemplating its own offer for CEDC, as part of a consortium that also includes Russia’s Alfa Group and CEDC shareholder Mark Kaufman.

SPI’s CEO Val Mendeleev told SND that his group, Alfa and Kaufman met in Paris recently with representatives of CEDC’s board, following which they will review CEDC’s updated financial figures and potentially submit their offer—expected to be around $275 million in cash—in the next few days.

Kaufman, who founded the Whitehall distribution business in Russia that CEDC acquired in 2008, wrote to CEDC’s board last month with an offer to provide $75 million in cash toward the company’s restructuring, as well as his services in helping turn the company around. But last week he sold around 3.5 million shares in CEDC, reducing his holding to below 5%. Alfa Group, meanwhile, is one of Russia’s largest private investment firms, with assets of nearly $65 billion at the end of 2011.

Just a week ago, CEDC had said it planned to go forward with a restructuring under which Tariko’s Roust Trading Ltd. would acquire 85% of the company in exchange for $172 million in cash and the compromise of a $50 million secured credit facility Roust had previously provided CEDC. CEDC’s board granted Tariko operational control of CEDC in January in exchange for $65 million.

 

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