Industry sources report Accolade Wines may walk away from merger negotiations with Australian Vintage and ink an alternative deal with Pernod Ricard.

Accolade Wines has been involved in a dual-track process with both wine companies for many months.

Australian Vintage has brands including Tempus Two and McGuigan, while Pernod Ricard’s brands include Jacob’s Creek and St Hugo.

The Australian reports Pernod Ricard has “had a suite of Australian assets up for sale through JPMorgan and Morgan Stanley”, while the Australian Financial Review says Pernod Ricard’s Australian assets “could fetch a price tag of about $500 million”.

When rumours of a sale first surfaced late last year, a spokesperson said: “Pernod Ricard notes the recent market rumours regarding its potential divestment of its wine activities in Australia and New Zealand. Pernod Ricard regularly assesses and evaluates its strategic opportunities and is continuously exploring options, including divestments or the streamlining of some or part of individual business units. 

“This is a usual process in line with management’s mission of delivering value to shareholders, employees, clients and stakeholders. Pernod Ricard nonetheless highlights that, at this stage, no decision has been made regarding any particular action.”

When asked to comment on the latest rumours, a spokesperson for Pernod Ricard said: “We never comment on M&A rumours and so therefore are not in a position to provide any statement relating to this subject.”

Sources told Street Talk that if discussions between Accolade and Pernod Ricard remained on track, a deal was likely to be signed by the end of May.

Talks between Accolade and Australian Vintage were also well advanced prior to Australian Vintage CEO Craig Garvin being dismissed earlier this month.

The Australian Vintage Board told the ASX that Garvin’s termination was “for engaging in conduct that, in its view, displayed a lack of judgement and was inconsistent with the values of the company and the high standards expected of its Chief Executive Officer.”

However, discussions are continuing with Australian Vintage to secure a backdoor listing.

Australian Vintage’s largest shareholder, Allan Gray, which holds 17.4%, told the AFR this is the most practical given both companies are grappling with excess grape processing capacity in an industry saddled by oversupply.