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Taittinger Sale Is Close

Investment group could sell Champagne house within four to six weeks

Mitch Frank
Posted: April 25, 2006

Taittinger could have a new owner by the end of May, says a source familiar with the negotiations. Members of the Taittinger family, which owned the Champagne house until recently, are among the bidders, according to French press reports.

Last July, the Taittinger family heirs, facing huge annual tax bills, sold Groupe Taittinger SA and Société du Louvre, a luxury hotel group, to U.S. private-equity fund Starwood Capital Group for $3.5 billion. Starwood owner Barry Sternlicht has made it clear since the time of the purchase that he was primarily interested in the hotel group and would resell the Champagne house. That set off months of speculation on who would buy it and whether it would stay in French hands.

The source close to negotiations told Wine Spectator last week that Starwood has whittled down the initial list of bidders to roughly half a dozen. Those parties will have four to six weeks to submit final bids, all of which were in the range of $625 million, according to the source.

French newspapers have speculated wildly on who the bidders are, mentioning almost every major liquor or wine corporation. But the French favorite appears to be Crédit Agricole, the nation's largest bank, which has reportedly allied itself with several members of the Taittinger family, including Pierre-Emmanuel Taittinger, one of the lead executives at the Champagne house.

Another wing of the family, including Claude Taittinger, the brand's director general and Pierre-Emmanuel's uncle, aligned itself with Belgian investor Albert Frère, who once owned a minority stake in the company, according to several news reports. But Frère dropped out of the bidding in April.

Crédit Agricole is a major player in Champagne, providing loans for both grapegrowers and producers. The bank provides more than 70 percent of the money that grapegrowers borrow annually, as well as half the loans taken out by Champagne houses, which finance grape purchases. Since its recent purchase of Crédit Lyonnais, it has become France's top bank.

The third-oldest Champagne house, Taittinger began life as Forest-Fourneaux in 1734. Pierre Taittinger bought it in 1931. Today, Taittinger produces more than 400,000 cases annually and owns more than 650 acres of vineyards—a rarity in a region where producers buy most of their grapes from small growers, of which there are more than 20,000. The company also owns Bouvet-Ladubay in the Loire Valley and Domaine Carneros in Napa.

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