Bacardi family steps closer to $7bn flotation

Bacardi, the family-run company which makes the eponymously named rum, moved a step closer to floating on the stock market yesterday after its board voted to issue two classes of stock.

The 139-year-old company, whose drinks cabinet also includes Dewar's Scotch whisky, said that two-thirds of its board members had supported the move at its annual general meeting, held in Hamilton, Bermuda.

An initial public offering will require another vote before new shares can be issued, the company said in a statement. The distiller could fetch as much as $7bn (£4.7bn) in a public offering, analysts have said.

There are 600 shareholders in the business, with all but a dozen descended from Don Facundo Bacardi, who set up the rum business in Cuba in 1862. There has been widespread speculation that the company would list on the American stock market, after pressure for it to do so from some of its senior executives.

They are thought to include Ruben Rodriguez, Bacardi's chairman, and its new chief executive, Javier Ferran. Both have worked for Bacardi for many years.

Analysts have suggested Mr Rodriguez wants to use proceeds from a share sale to finance possible acquisitions to remain competitive as the liquor industry consolidates.

In the past, the family has been able to raise funds to finance acquisitions, but competition from rivals Allied Domecq and Diageo has put Bacardi under pressure to increase its financial fire-power.

However, observers believe there are plenty of Bacardi family members who will oppose any attempts to list the company because they do not want to change the culture of the organisation.

Peter Foster, a journalist who has written a history of the family, said: "It's a bit of a conflict between the managerial shape of the company and those members of the company who think it's a sacred family heritage."

The Bacardi family are Cuban exiles who left the country in 1960 when their assets were confiscated by Fidel Castro's regime.