Foreign Bids Cheer Vinters’ Stocks

How sweet it was for a lot of investors.

Wine stocks rallied Tuesday after two foreign firms launched bids to acquire California vintners, prompting talk of additional deals.

Australia’s largest brewer, Foster’s Brewing Group, said it will buy Beringer Wine Estates Holdings (ticker symbol: BERW) for $1.5 billion plus assumption of debt.

Beringer shares rocketed $10.25 to a 52-week high of $55.31 after Foster’s offered $55.75 per share for Beringer.

News of the Foster’s deal came a day after wine producer R.H. Phillips (RHPS) said it will be acquired by Vincor International, Canada’s leading producer and marketer of wines and related products, for $7 a share.

R.H. Phillips jumped $2.06 to $6.81 on Monday and rose slightly to a new high of $6.88 on Tuesday. Esparto, Calif.-based R.H. Phillips said the deal was worth a total of $92 million, including debt to be assumed by Vincor.

In other trading Tuesday, Ravenswood Winery (RVWD) rallied 9% to a new high and Robert Mondavi (MOND) gained 3%, nearing its high.

“Given the highly fragmented nature of the wine industry, we expect ongoing consolidation to take place over the near term as evidenced by” the most recent deals, WR Hambrecht & Co. analyst Kristine Koerber said in a research note. “Continued consolidation among the larger premium wineries is likely both domestically and internationally, with Australia playing a key role.”

The Foster’s bid came just as the market was speculating that Southcorp Holdings, another Australian group, was discussing a bid for Beringer with U.S. vintner Kendall-Jackson Wine Estates.

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Palatable Performance

Most U.S. wine stocks climbed Tuesday after two foreign firms announced plans to acquire California-based vintners, fueling speculation about further takeovers in the industry.

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Ticker Tues. close YTD % Company symbol and change change R.H. Phillips RHPS $6.88, +$0.06 +161.9% Ravenswood Winery RVWD 14.69, +1.19 +39.9 Beringer Wine Estates BERW 55.31, +10.25 +38.7 Robert Mondavi MOND 40.00, +1.13 +15.1 Canandaigua Brands CDB/B 54.25, +4.50 -3.5 Chalone Wine Group CHLN 8.25, unchgd. -5.0 Brown-Forman BF/B 50.94, +0.06 -11.0 UST UST 20.81, +0.25 -17.4 S&P; 500 index 1,509.84, -4.25 +2.8

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Source: Bloomberg News