John McGrath, chief executive of GrandMet, gave the biggest hint yet that the UK drinks group would be prepared to negotiate a deal with Mr Arnault. His remarks came just 24 hours after Mr Arnault further muddied the waters by mounting a pounds 618m stock market raid on GrandMet's shares, taking his holding to 11.05 per cent, and simultaneously reducing his investment in Guinness from 14.2 to 12.46 per cent. Mr Arnault has spent more than more than pounds 1.4bn on GrandMet shares in the past month.
However, Mr McGrath remains opposed to Mr Arnault's tabled plans to form a pounds 15bn wines and spirits business, comprising Moet Hennessy, part of LVMH, the IDV business owned by GrandMet and the United distillers arm of Guinness. The two UK drinks groups are set to formally reject these plans within the next week.
GrandMet is unwilling to sell off its Burger King and Pilsbury food manufacturing operations to facilitate a three-way merger. However, GrandMet would consider alternative proposals to split Moet Hennessy into two. The merged Guinness and GrandMet, to be known as GMG Brands, would control the Hennessy cognac business and LVMH ownership of the Moet champagne operation.
"GrandMet and Guinness would not say no to the idea of acquiring the champagne business of Moet Hennessy and giving up the cognac side. We would also consider giving Mr Arnault a stake in an unquoted business within GMG Brands incorporating Moet Hennessy and our spirits business," Mr McGrath said.
"Mr Arnault's acquisition of shares in GrandMet increases his leverage and is a way of getting around the negotiating table again. It is our clear intention to find some form of settlement between the sides. We are completely open-minded to options that create value for our shareholders. But Moet Hennessy is not strategically vital to GMG and our merger can continue with out it. We are still analysing Mr Arnault's proposals carefully but it still appears they are not acceptable to us. We would not demerge any of our businesses in the foreseeable future," he added.
Mr Arnault has stepped up the pressure on GrandMet and Guinness to return to the negotiating table by arranging a series of meetings, beginning today with big shareholders in the UK companies, to outline his alternative proposals. He flew into London last night to have dinner with BZW, his advisers, ahead of the meetings.
"We are arranging some informal meetings with institutions and analysts which have expressed an interest in meeting Mr Arnault. But we are not likely to bring any new information to the table."
However GrandMet's and Guinness's institutional shareholders are unlikely to be moved by Mr Arnault's proposals unless he significantly reduces his demands to have a 35 per cent stake in the combined spirits group.
"The proposals put forward by Mr Arnault are clearly not acceptable," an institution said.