Rémy takeover rumoured

Share price rises despite poor performance

Rémy Cointreau is enjoying a stock market lift after rumours of a takeover bid by Brown-Forman – the makers of Jack Daniel’s and Southern Comfort – raised the group’s share price by 3%. The group has been badly hurt by a Chinese government crackdown on extravagant spending, with sales of the company’s flagship cognac falling 32% in the final quarter of last year, following a 30% drop in sales during the third-quarter.  It is reported that the offer was flatly refused and it is difficult to see how a family run business would be prepared to lose control of it, at any price.  In China cognac is regarded as a status symbol and our evidence shows that in time, the Chinese will find a way around the new ruling.  Remy should and will, we believe, fight hard to keep their independence as the market for luxury goods in China will inevitably return to being a highly lucrative one.