Brown-Forman Corporation (NYSE:BF-B) rejected a renewed $15 billion takeover bid from privately held spirits company Sazerac, calling the offer “not actionable.” Sazerac’s proposal, an all-cash offer of $32 a share, represents roughly a 23% premium to Brown-Forman’s recent closing price, though the company’s actual market value is closer to $13 billion. Sazerac first made the offer on May 1, and Brown-Forman rejected it then too, but Sazerac sent a new letter on July 24 directly to Brown-Forman’s Class A shareholders, most of whom are members of the Brown family, asking them to reconsider.
Why the Brown Family Keeps Saying No
The Brown family, through a voting group called Wolf Pen Branch, controls more than half of Brown-Forman’s voting stock, meaning no sale can happen without their approval regardless of shareholder pressure. This comes at a vulnerable moment for Brown-Forman Corporation (NYSE:BF-B): its revenue has declined for three straight years. CEO Lawson Whiting announced in July he will retire once the firm names a successor, and its marquee brand Jack Daniel’s has been losing market share, falling to 6.7% of the U.S. whiskey market last year from 7.8% in 2021. Brown-Forman had also been in separate merger talks with Pernod Ricard, which collapsed in late April over deal terms.
This makes you wonder: is Brown-Forman’s independence, defended twice now, actually the right call for shareholders, or is Sazerac’s offer the better outcome the Brown family won’t take?
Copyright: monticello / 123RF Stock Photo
The Bull Case
Sazerac’s offer includes financing backing from Wells Fargo and Apollo Global Management, an option for shareholders to roll their stakes into the combined company, and a dividend higher than Brown-Forman currently pays. A combined firm would become the second-largest spirits maker in the world behind Diageo, and Sazerac argues it can deliver major cost savings within two years without breaking up Brown-Forman Corporation (NYSE:BF-B)’s operations. Sazerac itself has grown sales at roughly 13% a year over the past three years and cut its leverage from 5 times debt to earnings down to 3 times, showing real financial discipline behind the bid.
The Bear Case
The Brown family has now rejected the offer twice and shows no sign of changing course, with Chairman Marshall Farrer saying the company remains focused on its own strategic plan. Brown-Forman is also smaller in one way: Sazerac’s own $6.6 billion in trailing sales actually beats Brown-Forman’s roughly $5.1 billion, underscoring how much ground Brown-Forman Corporation (NYSE:BF-B) has lost as its performance has struggled, the very weakness Sazerac is trying to exploit.
Insider Monkey’s Hedge Fund Data
Insider Monkey’s hedge fund database shows Brown-Forman had 36 hedge fund holders as of Q1 2026, down from 39 the quarter before. However, the dollar value hedge funds held actually rose, from about $279 million to $365 million. Among spirits and beverage peers, Constellation Brands had 56 holders, up from 53; Diageo had 35, up from 30, and Molson Coors had 41, down from 51. Brown-Forman Corporation (NYSE:BF-B) trails Constellation but sits ahead of Diageo and Molson Coors.
Conclusion
Sazerac can keep sending letters, but as long as the Brown family controls the votes, this deal only happens if the family decides it wants out, and nothing in their public statements suggests that’s close.
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Disclosure: None. This article is originally published at Insider Monkey.
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