Grand Met makes joint bid for distiller: 84m pounds offer intended to protect source of grain whisky

GRAND Metropolitan has moved to protect the source of grain whisky for its J&B Rare, the second-biggest-selling blend in the world, by making a joint pounds 84m bid for North British Distillery.

Roberston & Baxter, the joint bidder and a 33 per cent shareholder in North British, harbours similar protective interests.

It sources whisky from North British to fill bottles of Famous Grouse, which it produces for Highland Distilleries, and Cutty Sark, owned by Berry Bros & Rudd.

More than 60 per cent of whisky distilled by North British, which made nearly pounds 10m of profits last year, goes to IDV, the drinks arm of Grand Met, and Robertson.

More than 6 million cases of J&B, 2 million of Famous Grouse, and nearly 2 million Cutty Sark were sold in 1992.

Ian Good, managing director of Robertson, which is 35 per cent owned by Highland, said: 'The bid was partly to protect the source of supply, and because the pattern of whisky trading is changing.'

Protection was also confirmed as one of the takeover reasons by a spokesman for IDV, one of the 600 small shareholders in North British with a 6.3 per cent stake.

The bid also coincides with a favourable turn in the grain whisky cycle, which should see surplus stocks washed out of the industry next year. Blended Scotch consists of two parts grain and one of malt.

Analysts were slightly disappointed with the bid price, worth pounds 9 a share. Alan Gray at Charterhouse Tilney, the finance house, said: 'The bid is not over-generous . . . pounds 10 would have been fair.'

He said it was a pity for the industry that one of the last few independent grain distillers was disappearing. There are only eight in Scotland, of which Invergordon and William Grant are independent while three are owned by United Distillers, part of Guinness, and two by Allied-Lyons.

In a separate move, North British sold its 4.7 per cent holding in Highland for pounds 20m. The shares were placed at 329p to 335p each through Cazenove and Parsons Penney, the broking houses. Highland closed 5p down at 333p.

It is also understood that Remy Cointreau of France seized the opportunity to increase its stake in Highland from 8.2 per cent to 10 per cent - the maximum allowed under a deal in 1991 that further cemented their trading relationship.

Highland, in return, holds bonds that can be converted into a 30 per cent stake in Orpar, the controlling shareholder in Remy.