CEDC stock skyrockets 40% on news of Russian Standard buy-in
MOSCOW. Nov 29 (Interfax) - Stock in Central European Distribution Corporation (CEDC) soared 40% at the beginning of NASDAQ trading in response to the news that Rustam Tariko's group Russian Standard had bought 9.9% of the company.
As of 6.56 p.m. Moscow time, CEDC stock was at $4.77 per share, 40.3% higher than where it closed on Monday.
From November 15-21, Russian Standard bought 7,206,125 shares in the company for $25.35 million on the open market, CEDC said in a press release.
The majority of the stake - 6.4% - was acquired by CJSC Russian Standard at $3.19-$3.49 per share. The Russian Standard Bank acquired 3.5% of the shares at $3.08-$3.80 per share. Later, the bank sold these shares to its subsidiary Russian Standard Invest.
Russian Standard considers its investment in CEDC, which holds a strong position on the Eastern European alcohol market, to be strategic, the company said in a statement. The market sectors in which CEDC operates - low and mid-price segment vodka and wine - are complimentary to Russian Standard's business (premium vodka).
In the future, Russian Standard could increase its stake in CEDC, or just as equally withdraw from its capital, the statement said.
Before the acquisition, on October 7 of this year, LLC Russian Standard Vodka and CEDC completed a confidentiality agreement.
CEDC is one of the leading producers and distributors of vodka in Poland. The company owns the Zubrowka, Bols and Soplica brands, and distributes more than 700 brands, including Remy Martin, Jagermeister, Metaxa, Corona, Foster's, Jim Beam and Guinness. The company has been listed on NASDAQ since August 1999.
The company's 2010 revenue was $711.5 million.
In Russia, CEDC owns vodka makers Russian Alcohol and Parliament. Russian Alcohol produces the Zelenaya Marka, Zhuravli and Marusya vodka brands, among others, as well as the low-alcohol cocktails VDK, Bravo, Gordon's and Doza.
The Russian Alcohol group includes the Topaz, Siberian and Bravo Premium distilleries, and the First Blending Plant. The Parliament group owns the Urozhai distillery.