Shares in Conviviality Retail, the owner of off-licence brands Bargain Booze and Wine Rack, shot up this morning on the back of news of a £200m takeover of Matthew Clark, the UK’s biggest drinks wholesaler.
Matthew Clark, which sells to the on-trade, was put up for sale earlier this year by its owners, Hertford Cellars, a subsidiary of Australian winemaker Accolade Wines; and debt-burdened pub group Punch Taverns. Both have a 50% stake in the wholesaler.
Conviviality already acts as an off-trade wholesaler by providing its 575 or so retail franchise partners at Bargain Booze and Wine Rack with wine, beer and spirits. The takeover means that the group will now move into on-trade, providing pubs, hotels and bars with its own alcohol as well as building on Matthew Clark’s existing relationships with drinks manufacturers.
Punch Taverns is selling its stake for £100.7m in cash and will receive a £1.5m dividend from Matthew Clark prior to closing the deal. Accolade Wines is also selling its stake to Conviviality and both shareholders have entered into a 10-year non-exclusive supply contract.
The deal is classed as a” reverse takeover” because of Conviviality Retail’s smaller market value, and is being funded by a £130m share placing and a £80m drawdown of the group’s debt facilities. It is anticipated that the Matthew Clark brand will remain, at least for the time being. The deal is subject to shareholder approval.
We’ll be covering the takeover in more detail in the September issue of Wholesale News, out next week!