Vincor Reject First Bid - Constellation Will Likely Bid More

(TSX:VN), one of the world's largest producers and distributors of wine and related products, today confirmed that it has received an unsolicited approach from Constellation Brands, Inc. of Fairport, New York indicating a price of $31 per share.  No formal offer has been received.  After a thorough review, Vincor's Board of Directors has determined that the $31 price contemplated in Constellation's approach is inadequate and not in the best interests of shareholders in light of the future earnings prospects for the company and the significant synergies that Constellation would enjoy from acquiring Vincor.  These synergies have the potential to double the company's annual EBITDA.

To assist in the analysis of this approach, Vincor's Board of Directors has established a Special Committee of Independent Directors comprised of Michael Bregman, Mark Hilson, Robert Luba and Hugh Segal.  The Board has also retained BMO Nesbitt Burns and Merrill Lynch as financial advisors. The Board of Directors advised Constellation that it would be prepared to consider any proposal that accurately includes the company's prospects and reflects the vast synergies an acquirer would realize. 

"We view this as an opportunistic and inadequate approach by Constellation.  The Board and our financial advisors intend to continue to aggressively pursue all alternatives to maximize value for Vincor's shareholders," said Mark Hilson, Chair of the Special Committee. "The initial analysis by management and our independent advisors strongly suggests that Constellation's approach grossly undervalues the growth prospects in Vincor's core business and does not take into consideration the significant synergies that an international wine company like Constellation could achieve." 

Mr. Hilson also noted "The $31 price per share indication was preceded by a range stated by Constellation of $30 to $34 and, immediately prior to Constellation's news release, a price indication by Constellation of $36 or higher."

"As a result of previously announced efforts to evaluate potential cost savings and profit improvement opportunities throughout its operations, Vincor has identified approximately $16 million in annualized cost savings, $5 million of which will be reflected in the financial results for the current fiscal year," added Donald L. Triggs, President and Chief Executive Officer. "Constellation's approach does not fully value these savings, the momentum of our premium brands and Vincor's projected organic growth."

Vincor also announced that its Board of Directors has approved the adoption of a limited duration Shareholders Rights Plan.  The purpose of the Rights Plan is to ensure that the Board will have sufficient time to properly develop and pursue all alternatives that could maximize value for Vincor's shareholders.

The Rights Plan is not intended to prevent take-over bids.  Those bids that meet certain requirements intended to protect the interests of shareholders are considered under the Rights Plan to be "Permitted Bids".  A Permitted Bid is a take-over bid made by way of a circular for all outstanding common shares, which remains open for at least 60 days and satisfies certain other conditions.  The Rights Plan will be in effect for a period of six months less one day, at which time it will expire automatically.

The adoption of the Rights Plan is subject to the approval of the Toronto Stock Exchange.