Brazilian billionaire Jorge Paulo Lemann 'looking at Diageo' with 3G Capital

Analysts at Jefferies said a pure, leveraged buyout could be a “huge stretch” for 3G

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The Independent Online

Diageo was the biggest gainer on the FTSE 100 yesterday, jumping nearly 7 per cent amid reports Brazil’s richest man could bid for the drinks giant.

Despite some analyst scepticism, shares in thegroup behind brands such as Smirnoff vodka and David Beckham’s Haig Club whisky rose 119.5p to 1,880p, valuing Diageo at £47bn.

Jorge Paulo Lemann, who is reportedly assessing a bid along with his private-equity firm 3G Capital, used to own Brazil’s largest brewer AmBev and helped create one of the world’s largest beer groups, AB InBev. He has already had dealings with Diageo, buying the Burger King chain from it in 2010.

Analysts at Jefferies said a pure, leveraged buyout could be a “huge stretch” for 3G, but noted that the rumours were a timely reminder of “the value lurking in blue-chip consumer staples assets like Diageo”. A move for Diageo by AB InBev and 3G Capital “feels more plausible”, they added.

Diageo refused to comment yesterday on the takeover speculation.

Mr Lemann’s 3G bought Heinz alongside the veteran investor Warren Buffett for $28bn (£18bn) in 2013, and earlier this year merged it with the US food giant Kraft in a $46bn deal.

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