The French beverage group Pernod Ricard has received seven offers for BWG, its Irish and British wholesale distribution business, in a deal that could be worth up to Euro350m. Potential bidders for BWG, which owns the Bargain Booze chain, include trade and financial buyers, the Financial Times reported.
Electra Partners, Legal & General Ventures, Mercury Private Equity and Candover, all UK-based equity groups are said to have made offers for the business.
This is the auction's second round and Pernod Ricard is expected to move to preferred-bidder status later this month.
The sale is expected to be completed by the end of the summer.
Pernod Ricard put BWG up for sale last March to reduce the debt incurred following its joint £5.6bn takeover with the rival group, Diageo, of Seagram's drinks business last year.
At the time of the takeover, Pernod Ricard said it would sell at least Euro1bn of assets to help reduce the debt: the sale to Cadbury Schweppes of its soft-drink unit Orangina-Pampryl is in the final stage; and the sale of its fruit processing unit SIAS is also under way.
If BWG is sold to a financial buyer, it is expected to back the management, which includes the managing director, Leo Crawford.
BWG operates 80 cash-and-carry warehouses and delivers to retailers.
It also operates the Spar and Mace grocery franchises in Ireland.
The division employs 2,000 staff who are expected to receive a cash windfall from the sale of the business.
BWG has an enterprise value of about Euro350m, of which Euro150m is debt.
The division reported an increase in sales of 34.6 per cent in the year 2000 to Euro1.3bn, of which 13.5 per cent accrued from organic growth, stripping out the impact of currency and consolidation.
Operating profits rose 27.6 per cent to Euro44.7m. Last year, BWG embarked on a rapid expansion and bought Saxton and Rounds and Daunts.
Bargain Booze has opened 20 more stores this year.
The European Commission cleared Diageo and Pernod Ricard's takeover of Seagram's business earlier this year, aided by the two group's agreement to dispose of some assets, including its Four Roses Bourbon brand, to assuage competition concerns.
However, Diageo and Pernod Ricard still have to obtain approval from the US and Canadian competition authorities, expected to be concluded at the end of this month.