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V&S sale could be hit by market instability

Published:  23 July, 2008

Bids are due in for Absolut manufacturer Vin & Sprit (V&S) this week but market instability could affect this process.

This was the message from Swedish financial markets minister Mats Odell who told Swedish radio that the government could go back on its privatisation initiative if the bids were not high enough.

The Swedish government is privatising six state-owned companies but V&S represents the most sought after of these.

Major players in the industry such as Diageo, Pernod Ricard, Fortune Brands and Barcardi have all been linked with potential bids.

The company is valued at between $5 and $7 billion.

Odell went on to tell Reuters the recent stock market fluctuations had notable but not complete influence on the sale of companies.

He said: " In times of bourse turbulence, it is a matter of keeping calm and continuing our process of careful analysis.

"For V&S, we have begun an auction process which we believe will yield a good price which represents the value of the company.

"It is a good company, with a strong brand, and we see strong interest in it. We will evaluate the indicative bids carefully, and we will sell when we get a price which represents the long-term value of the company."

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