According to a report in The Wall Street Journal, Sazerac has approached Brown-Forman seeking a deal between the two whiskey giants.
It follows Brown-Forman and Pernod Ricard confirming last month that they were in discussions regarding a potential business merger.
In this case, both Sazerac and Brown-Forman have said they will not be issuing a statement on the matter.
Both companies have their principal business headquarters in Louisville, Kentucky.
Sazerac’s portfolio includes 550 brands, ranging from Buffalo Trace bourbon to Fireball Cinnamon Whisky and BuzzBallz ready-to-drink cocktails.
Brown-Forman’s portfolio includes whiskey brands such as Jack Daniel’s, Woodford Reserve and Old Forester, tequila brands such as Herradura and el Jimador, Benriach Scotch whisky and a range of RTDs.
“Sazerac traces its roots to a 1630 vineyard and distillery in France. Over the years, the company has acquired brands from Joseph E. Seagram & Sons and Constellation Brands,” The Wall Street Journal said.
Sazerac bought the Southern Comfort and Tuaca brands from Brown-Forman 10 years ago.
Brown-Forman shares surged nearly 14% in Thursday midday trading after The Wall Street Journal reported Sazerac’s approach.
According to TD Cowen analyst Robert Moskow: “Given the scarce-asset nature of the Brown-Forman business and its biggest brand, Jack Daniel’s, we think a buyer would have to pay a 30-35% equity premium to get a deal done with complete change of control.”
Moskow said he wouldn’t be surprised to see other companies join the bidding for Brown-Forman, suggesting Bacardi, Campari and Diageo as other possible contenders.