Possible Wild Turkey Buyers Stopping By To Kick Tires.

Last month, I reported that Pernod Ricard might be shopping Wild Turkey. Pernod never announced that Wild Turkey, Tia Maria, or any other specific asset was on the block. What it said was that only its core brands are sacred as it looks to raise cash to reduce the debt it assumed to buy Absolut Vodka.

Pernod does not consider Wild Turkey to be one of its core brands.

Then and again yesterday, I checked with Pernod's PR shop in New York to see if they had any information. They have none. (They also aren't denying any of what follows.)

What nobody in New York seems to know, everybody at the distillery in Lawrenceburg, Kentucky, is talking about. According to sources there, the brand and its distillery are for sale, the expansion plans have been put on hold, and representatives of at least two potential buyers are coming by for visits in the next couple of weeks.

The first, expected next week according to distillery sources, is Diageo. The world's largest drinks company is light in its American whiskey portfolio and could probably acquire Wild Turkey without having to divest itself of anything else, an attractive fact for Diageo because the industry is now so consolidated, and Diageo is so huge, that anytime it buys something it usually has to sell something else to allay the monopoly concerns of regulators, either in Europe, the U.S., or both.

The other candidate is Proximo Spirits. Never heard of them? You're not alone. If you are way into spirits you may have heard of a couple of their brands: 1800 Tequila, Three Olives Vodka and Matusalem Rum.

Not a lot is known about Proximo because they are new (less than two years old) and privately held. The president is Mark Teasdale, former managing director of William Grant & Sons North America. As near as can be told, they don't have any production facilities but are strictly a marketing company. They own some of their brands and, in other cases, merely own the North American marketing rights. They haven't actually built any of these brands, all of which they acquired.

The head-scratcher here is how can a company like Proximo come up with enough money to buy Wild Turkey? Sources at Sazerac say they looked at Wild Turkey and found the Constellation Spirits deal a better fit and more in their price range. Constellation reported that sale was worth $334MM, so that gives you some idea of what Turkey might bring.

What is more, the situation suggests that Pernod will insist on an all-cash deal, or something close. The purpose of the sale is to reduce Pernod's debt, so Pernod will not be inclined to finance the deal, as sometimes happens with corporate acquisitions. On the other hand, Proximo must be a serious contender or else Pernod would not have invited them to drop by and examine the merchandise.

It should be added that none of this is official and, in fact, the official sources are claiming ignorance.

Another aspect of this is that Wild Turkey is not a distressed property, which is precisely why Pernod is willing to sell it. Think about trades in sports. It's the best players who get traded, because they are worth something, not the worst ones. Pernod could perfectly well just keep Turkey and won't sell unless it can get top dollar.

This uncertainty about ownership appears to have put the expansion at Wild Turkey on hold. The original plan, announced about 18 months ago, was to double the distillery's capacity, from 11MM gallons a year up to 22MM. They had a ground-breaking and have done some site preparation, but that's about it. The people at the distillery, at least, assume nothing more will happen until a new owner is in place.

The same thing happened when Beam bought Maker's. An expansion plan at Maker's was delayed for several years and is still far from completed.

Unfortunately for American whiskey enthusiasts, American whiskey is small beer for most of the big, international beverage companies, so the products we care about get swept up in deals that are being made for other reasons. One simply hopes that whoever buys Wild Turkey will value it more than the seller did.