8th Jun 2015 08:05
LONDON (Alliance News) - Shares in FTSE 100-listed Diageo PLC rose sharply Monday after reports in the press late Friday suggested that Brazil's richest man, Jorge Paulo Lemann, is weighing up a takeover bid for the drinks company.
Diageo's shares are currently quoted up 6.8% at 1,879.50 pence, making it the best-performing stock in the blue-chip index.
The Times, The Telegraph and Bloomberg all cited a report from columnist Lauro Jardim of Brazilian publication Veja that Lemann, who founded private equity firm 3G Capital, is in the early stages of preparing a potential offer for Diageo.
Shore Capital, however, is not confident that any sort of deal will transpire. "As to how likely a bid might be for Diageo it is difficult say," says Phil Carroll, an analyst at the brokerage. "We would have thought that through its ownership of AB InBev, a bid for SABMiller is more likely especially given the greater level of potential synergies on offer," the analyst adds.
"In summary, we expect Diageo shares to be strong today, but we do not expect 3G to make a bid for the company," Carroll says.
Shares in SABMiller was down 1.1% at 3,330.00 pence Monday morning, one of the biggest decliners in the FTSE 100.
By James Kemp; [email protected]; @jamespkemp
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