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Vivendi gets two bids
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December 12, 2000: 2:48 p.m. ET
Diageo Pernod team one of bidders for merged media firm's Seagram's unit
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NEW YORK (CNNfn) - Vivendi Universal SA said Tuesday it had received bids for the spirits-and-wine business of Seagram Co. and planned to wrap up a sale by year end.
One of the bidders was Anglo-French team Diageo PLC and Pernod Ricard, a source close to the companies said. A spokesman for Pernod Ricard declined to comment and Diageo didn't immediately return calls seeking comment.
 Vivendi, the fourth-most valuable company listed on the Paris Bourse, acquired the drinks operation following the completion of a three-way merger with Seagram and pay-TV broadcaster Canal Plus.
"We have at this time received two very competitive proposals for the sale of our spirits and wine businesses," said spokesman Antoine Lefort. "We are confident that the process is on the right track and a definitive agreement will be signed before the end of the year."
The auction has attracted some of the world's top drinks industry names, lured by Seagram's coveted brands, which include Chivas Regal Scotch whisky, Captain Morgan Original Spiced Rum and Crown Royal.
The Diageo-Pernod duo, seen as the favorite to win the bid, made a joint bid of about $8 billion, the Wall Street Journal reported, citing people familiar with the matter. Bermuda-based Bacardi Ltd. made an offer with Brown-Forman Corp., also believed to be close to $8 billion, the report said.
Vivendi's Lefort declined to comment on the bidders or the value of any offers.
Vivendi shares jumped 4.1 percent to  77.00 and Pernod slipped 2.3 percent to 59.45 in Paris Tuesday afternoon. Diageo rose 1.2 percent to 675 pence in London. In the U.S., Vivendi (V: Research, Estimates) gained $2.62 to $67.62 in afternoon trading Tuesday.
Diageo, known for Johnnie Walker Scotch and Smirnoff vodka, and Pernod, the maker of aniseed-based liqueur and Jameson's Irish whiskey, have agreed to divide up the spoils if their bid is successful. Diageo PLC (DEO: Research, Estimates) ADS gained 13 cents to $39.31 in the U.S.
Allied Domecq drops out
The U.K.'s Allied Domecq PLC, which owns Ballantine's Scotch and Beefeater gin, is expected to announce Wednesday that it is dropping out of the auction, industry sources told Reuters. Allied was tipped as a hot favorite for Seagram but has concluded that a purchase would not deliver shareholder value, Reuters reported Tuesday, Allied no longer needed Seagram after recently attempting to secure Captain Morgan and taking on the U.S. rights to Stolichnaya vodka.
Allied Domecq shares slipped 1.9 percent to 419.25 pence Tuesday.
Auction organizer Morgan Stanley set 5:00 p.m. New York time on Monday as the deadline for bids. A winner could be decided by the end of this week, although the outcome was more likely to be announced on Monday, Dec. 18, Reuters reported.
The Seagram business, the world's third-largest spirits empire after Diageo and Allied Domecq, is the most attractive drinks business likely to come to the market for some time, and will ensure the buyer a pre-eminent position in the liquor industry. 
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