EXHIBIT 99.1
NEWS RELEASE CONTACTS:
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MEDIA RELATIONS:
Philippa Dworkin - 585-218-3733
Mike Martin - 585-218-3669
INVESTOR RELATIONS:
Lisa Schnorr - 585-218-3677
CONSTELLATION BRANDS CONFIRMS OFFER TO ACQUIRE
THE ROBERT MONDAVI CORPORATION
OFFER WOULD PROVIDE SUBSTANTIAL CASH PREMIUM VALUE TO
MONDAVI SHAREHOLDERS
FAIRPORT, N.Y., Oct. 19, 2004 - Constellation Brands, Inc. (NYSE: STZ, ASX:
CBR), today confirmed that it has offered to acquire The Robert Mondavi
Corporation (NASDAQ: MOND) in a transaction in which Mondavi's Class A
shareholders would receive $53.00 per share in cash and Mondavi's Class B
shareholders would receive $61.75 per share in cash. The difference in prices
reflects the premium allocation between Mondavi's Class A and Class B shares in
connection with the recapitalization Mondavi has proposed.
Constellation's offer represents a premium of 37% over the closing market
price of Mondavi's publicly-traded Class A shares on Monday, Oct. 11, 2004, the
day before the proposal was made. The total value of this transaction is
approximately $1.3 billion, including approximately $970 million of equity on a
fully-diluted basis plus the assumption of approximately $333 million of Mondavi
net debt.
"We would like to commence discussions with Mondavi immediately with a goal
of entering into a merger agreement with Mondavi as soon as possible," stated
Constellation Brands Chairman and Chief Executive Officer Richard Sands. "The
Mondavi Board of Directors has expressed its commitment to maximize shareholder
value and has indicated that Mondavi would meet with us to discuss our offer. We
are prepared to begin immediately. Our offer is not conditioned on the
completion of Mondavi's recapitalization and we see no reason to delay. In
addition, just as we have honored the economic effect of the recapitalization in
our offer, we would be willing to consider allowing a shareholder approval that
would give effect to the one share/one vote aspect of the proposed
recapitalization. This matter has the highest priority for us, and we are
committed to working with Mondavi to bring this vision to fruition."
Sands explained, "The combination of Constellation and Mondavi is a
compelling strategic fit that strengthens Constellation and provides immediate
value to Mondavi's shareholders. Mondavi, with its great portfolio of wines,
unmatched brand equity and storied tradition, adds breadth to Constellation's
world-leading wine portfolio, and provides Constellation with additional growth
opportunities.
"Our all-cash offer is not subject to financing and would provide Mondavi's
shareholders with immediate value greater than the value of Mondavi's announced
restructuring exercise as projected by Mondavi as recently as one month ago.
Moreover, our premium transaction would insulate Mondavi shareholders from the
risks inherent in the Mondavi restructuring plan, many of which Mondavi
describes in a preliminary proxy statement that it filed on October 8, 2004,"
Sands concluded.
Constellation has received commitments for the financing necessary to
complete the transaction. The transaction will be accretive to Constellation's
earnings and cash flow per share in the first year.
Attached is the full text of all written correspondence between Richard
Sands and Ted Hall, Chairman of the Board of The Robert Mondavi Corporation.
ABOUT CONSTELLATION
Constellation Brands, Inc. is a leading international producer and marketer
of beverage alcohol brands with a broad portfolio across the wine, spirits and
imported beer categories. Well-known brands in Constellation's portfolio
include: Corona Extra, Pacifico, St. Pauli Girl, Black Velvet, Fleischmann's,
Mr. Boston, Paul Masson Grande Amber Brandy, Franciscan Oakville Estate,
Estancia, Simi, Ravenswood, Blackstone, Banrock Station, Hardys, Nobilo, Alice
White, Vendange, Almaden, Arbor Mist, Stowells and Blackthorn.
INVESTOR/MEDIA/PUBLIC CONFERENCE CALL
A conference call to discuss the proposed acquisition is scheduled on Oct.
19, 2004 at 10:30 a.m. (Eastern). The conference call can be accessed by dialing
(877) 423-4013 (U.S. dial-in) or (706) 679-0881 (international dial-in)
beginning 10 minutes prior to the start of the call. A live listen-only web cast
of the conference call, together with a copy of this media release (including
the attachments) are available on the Internet at Constellation's web site:
www.cbrands.com under "Investors."
FORWARD LOOKING STATEMENT
This press release contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements are subject to a number
of risks and uncertainties, many of which are beyond Constellation's control,
that could cause actual results to differ materially from those set forth in, or
implied by, such forward-looking statements. All statements other than
statements of historical facts included in this press release are
forward-looking statements. All forward-looking statements speak only as of the
date of this press release. Constellation undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. There can be no guarantee that any transaction
between Constellation and Mondavi will occur. In addition to the risks and
uncertainties of ordinary business operations, the forward-looking statements of
Constellation contained in this press release are also subject to the following
risks and uncertainties: Constellation achieving certain sales projections and
meeting certain cost targets; wholesalers and retailers may give higher priority
to products of Constellation's competitors; raw material supply, production or
shipment difficulties could adversely affect Constellation's ability to supply
its customers; increased competitive activities in the form of pricing,
advertising and promotions could adversely impact consumer demand for
Constellation's products and/or result in higher than expected selling, general
and administrative expenses; a general decline in alcohol consumption; increases
in excise and other taxes on beverage alcohol products; and changes in foreign
currency exchange rates. For additional information about risks and
uncertainties that could adversely affect Constellation's forward-looking
statements, please refer to Constellation's Annual Report on Form 10-K for the
fiscal year ended February 29, 2004 and Constellation's Quarterly Report on Form
10-Q for the fiscal quarter ended August 31, 2004.
ADDITIONAL INFORMATION
Depending on future developments, Constellation may file with the SEC a proxy
statement for solicitation of proxies from the shareholders of Mondavi in
connection with Mondavi's annual meeting which is scheduled to take place on
November 30, 2004. We urge investors and security holders to read any such proxy
statement if and when it becomes available. Any such proxy statement would
contain important information. Investors and security holders would be able to
obtain a free copy of such proxy statement, if and when it becomes available, at
the SEC's internet site (http://www.sec.gov (http://www.sec.gov) ) or directly
from Constellation by making a request to: Constellation Brands, Inc., 370
Woodcliff Drive, Suite 300, Fairport, New York, 14450, Attention: Corporate
Secretary. Constellation and certain other persons referred to below may be
deemed to be participants in the solicitation of proxies. The participants in
any such solicitation may include certain directors and executive officers of
Constellation. A detailed list of the names of Constellation's directors and
officers is contained in Constellation's proxy statement for its 2004 Annual
Meeting, filed with the SEC on June 17, 2004, which may be obtained without
charge at the SEC's internet site (http://www.sec.gov (http://www.sec.gov) ) or
by directing a request to Constellation at the address provided above. As of the
date of this communication, Constellation owns 100 shares of Mondavi Class A
Common Stock. To Constellation's knowledge, none of the officers or directors of
Constellation who would be expected to participate in any such solicitation of
proxies owns any shares of Mondavi Class A Common Stock or Mondavi Class B
Common Stock. Except as disclosed above and in Constellation's proxy statement
for its 2004 Annual Meeting, to the knowledge of Constellation, none of the
directors or executive officers of Constellation who would be expected to
participate in any such solicitation of proxies has any material interest,
direct or indirect, by security holdings or otherwise, in Mondavi or
Constellation.
# # #
[LETTERHEAD OF CONSTELLATION BRANDS, INC.]
October 12, 2004
Mr. Ted W. Hall
Chairman of the Board
Mondavi
841 Latour Court
Napa, CA 94558
Dear Ted:
As we discussed, we believe that a combination of Constellation Brands,
Inc. ("Constellation") and The Robert Mondavi Corporation ("Mondavi" or the
"Company") is compelling and will provide substantial benefits to both
companies' shareholders and other interested constituencies. I thought it would
be useful to memorialize for you and to set out for the Mondavi Board of
Directors the specifics of our proposed business combination so that your Board
will have the benefit of our thinking and be able to consider our proposal fully
and expeditiously. Constellation proposes to acquire Mondavi in a transaction in
which Mondavi's Class A shareholders would receive $53.00 per share in cash.
While we do not believe that it is necessary to finalize your proposed
recapitalization prior to the acquisition, we would respect the premium
allocation between Mondavi's Class A and Class B shares that you reached in
connection with the proposed recapitalization. Accordingly, in the transaction
we propose, Mondavi's Class B shareholders would receive $61.75 per share in
cash. Our offer represents a premium of 37% over yesterday's closing market
price of the Company's publicly traded Class A shares and values the
fully-diluted equity of Mondavi at approximately $970 million.
We believe that our offer is far superior, in terms of value and certainty,
to the Company's announced restructuring involving the divestiture of its luxury
brands and other non-strategic assets. At the September 20 Bank of America
conference, Mondavi's management projected that over time Mondavi can achieve a
total equity value in the range of $749-$929 million, assuming the divestiture
of Mondavi's luxury brands at favorable valuation levels and through a business
restructuring that management indicated may take up to a year to complete. In
light of this, I was frankly quite surprised at your negative reaction to our
premium offer. At approximately $970 million in aggregate consideration for the
fully-diluted Mondavi equity, our offer provides immediate value that
substantially exceeds management's highest projections, without the delay or
execution risk inherent in management's strategy, and without the substantial
complication of a negotiated licensing arrangement that attempts to allocate
rights between "luxury" and "lifestyle" brands and market segments. Because we
believe that implementing your restructuring plan would diminish the value of
the Company to us, we urge you to refrain from disposing of any assets or
otherwise pursuing a restructuring plan that would adversely affect the premium
we can make available to your shareholders.
We understand and appreciate the long, rich history of your Company, the
Mondavi family and the Mondavi brand. Constellation will honor and protect that
great tradition. We fully expect that the Mondavi name will continue to be
associated with the highest in quality, and the Mondavi brand will remain an
industry leader. While our offer is for all of the Mondavi shares and is not
conditioned upon continued participation of any individuals, we hope that
members of the Mondavi family will be interested in remaining involved in the
Mondavi business, and if they are interested we would be pleased to discuss
their continuing role. In addition, we respect the talent and experience of
Mondavi management and admire the contributions it has made over the years. We
intend to honor the contractual commitments to members of Mondavi's management
and would look to provide opportunities within our organizations for those
individuals. It's in our interest to provide appropriate opportunities for good
people.
Our proposal is not subject to financing or any unusual governmental or
third party approvals. We would expect to complete customary due diligence and
to negotiate a mutually satisfactory definitive merger agreement. Our diligence
would be largely confirmatory in nature, and our contract would be customary for
a public company acquisition. We are ready to undertake a due diligence review
of Mondavi at your earliest convenience and to meet with your team to negotiate
a merger agreement at any time.
Together with our outside advisors, we are prepared to commit the resources
necessary to proceed expeditiously towards reaching an agreement with Mondavi
regarding a combination. In this regard, we have retained Merrill Lynch & Co.,
Wachtell, Lipton, Rosen & Katz and Nixon Peabody LLP to assist us in this
transaction.
We are submitting this letter to you in confidence. We understand that you
have recently filed a preliminary proxy statement with respect to the proposed
recapitalization, but we do not consider that fact to preclude confidential
discussions between us at this time. Indeed, we believe that we could promptly
negotiate a merger agreement with you and seek approval from your stockholders
of a Mondavi/Constellation business combination in lieu of seeking approval of
your proposed recapitalization. Your proxy statement indicates that superior
alternatives may arise that make it inadvisable to proceed with your
restructuring plans. We believe that your stockholders would be surprised that
you were so dismissive of our proposal as they would regard our proposal as just
such a superior alternative and would strongly prefer our plan to the proposed
recapitalization and restructuring.
Our Board of Directors has authorized this proposal and fully supports a
combination between Constellation and Mondavi. We sincerely hope that on further
reflection together with Mondavi's other directors you and the entire Mondavi
Board will share our enthusiasm for this transaction. We hope to hear back from
you as soon as possible. This matter has the highest priority for us and we are
committed to working with you in any way we can to bring this vision to
fruition.
Sincerely,
/s/ Richard Sands
Richard Sands
Chairman of the Board
and Chief Executive Officer
cc: Members of the Mondavi Board of Directors
* * * * * *
[LETTERHEAD OF THE ROBERT MONDAVI CORPORATION]
October 13, 2004
Mr. Richard Sands
Chairman of the Board
and Chief Executive Officer
Constellation Brands, Inc.
370 Woodcliff Drive, Suite 300
Fairport, New York 14450
Dear Mr. Sands:
I am in receipt of your letter of October 12, 2004. I will promptly convene
a meeting of the Board of Directors of The Robert Mondavi Corporation to
consider the merits of the proposal in your letter. We will advise you of the
Board's response following the meeting.
Sincerely,
/s/ Ted W. Hall
Ted W. Hall
Chairman of the Board
* * * * * *
[LETTERHEAD OF THE ROBERT MONDAVI CORPORATION]
October 14, 2004
Mr. Richard Sands
Chairman of the Board
and Chief Executive Officer
Constellation Brands, Inc.
370 Woodcliff Drive, Suite 300
Fairport, New York 14450
Dear Richard:
I just wanted to let you know that we are diligently pursuing the
scheduling of a Board meeting, at which the Board will carefully consider your
proposal. As you know, Robert Mondavi Corporation directors are located
throughout the world. We expect we will be able to have the meeting no later
than Tuesday, October 19, and we will promptly advise you of the Board's
decision.
Sincerely,
/s/ Ted W. Hall
Ted W. Hall
Chairman of the Board
* * * * * *
[LETTERHEAD OF CONSTELLATION BRANDS, INC.]
October 14, 2004
Mr. Ted W. Hall
Chairman of the Board
Mondavi
841 Latour Court
Napa, CA 94558
Dear Ted:
Thank you for your letter of yesterday indicating that you are convening a
board meeting to discuss our offer. We are encouraged this meeting will be
convened promptly. We would be pleased to attend the meeting and answer any
questions you have about our offer.
We would very much prefer to negotiate with you and your board on a
confidential basis. We believe that we could very quickly complete our
confirmatory due diligence, negotiate and enter into a customary public company
merger agreement (with a customary fiduciary out), and announce a deal between
our companies that would deliver a significant premium over your stock price. We
believe that our offer clearly adds value for the benefit of all Mondavi
shareholders.
Notwithstanding our desire to proceed on a confidential basis, we believe
that it is critical to move rapidly toward completion. We are committed to this
transaction and are prepared to take all appropriate steps to see the vision
through.
We would also like to reiterate that implementing your restructuring plan
would diminish the value of the Company to us and we urge you to refrain from
disposing of any assets or otherwise pursuing a restructuring plan that would
adversely affect the premium we can make available to your shareholders. We
believe that any such action would be contrary to your fiduciary duties while
our offer is pending.
Sincerely,
/s/ Richard Sands
Richard Sands
Chairman of the Board
and Chief Executive Officer
RS/cay
cc: Members of the Mondavi Board of Directors
* * * * * *
[LETTERHEAD OF THE ROBERT MONDAVI CORPORATION]
October 18, 2004
Mr. Richard Sands
Chairman of the Board
and Chief Executive Officer
Constellation Brands, Inc.
370 Woodcliff Drive, Suite 300
Fairport, New York 14450
Dear Richard:
The Board of Directors, in conjunction with the financial and legal
advisors of The Robert Mondavi Corporation, has carefully considered the
proposal contained in your letter to me dated October 12, 2004. The Board of
Directors has not rejected your proposal and will consider it as part of its
on-going process to maximize value for all of its shareholders.
The Board of Directors has also reaffirmed its intent to seek shareholder
approval for its recapitalization plan which transfers the Company's domicile to
Delaware and converts its two class equity structure, where the Mondavi family
Class B shares have ten votes per share and the Class A public shares have one
vote per share, into a single class with equal voting rights. The Board believes
that the recapitalization plan is important to achieving full value for its
shareholders.
The Board intends to continue its careful evaluation of all of the
Company's strategic options, including your proposal. The Company will be ready
shortly to have discussions with you and other interested parties so that we are
able to effectively consider all of our options as we progress towards the
shareholder approval of the recapitalization plan at the Company's annual
meeting currently scheduled for November 30, 2004.
I will shortly propose dates when the Company is prepared to enter into
further discussions with you. Thank you for your interest in The Robert Mondavi
Corporation.
Sincerely,
/s/ Ted W. Hall
Ted W. Hall
Chairman of the Board
* * * * * *
[LETTERHEAD OF CONSTELLATION BRANDS, INC.]
October 19, 2004
Mr. Ted W. Hall
Chairman of the Board
Mondavi
841 Latour Court
Napa, CA 94558
Dear Ted:
We are in receipt of your letter dated October 18, 2004 advising us that
the Board of Directors of The Robert Mondavi Corporation ("Mondavi" or the
"Company") will consider our offer as part of its on-going process to maximize
value for all of its shareholders. We appreciate your stated willingness to meet
with us and we look forward to meeting as soon as possible.
Your announcement yesterday regarding Mondavi's receipt of a proposal to
acquire the Company has resulted in speculation with respect to your stock and
ours and we therefore feel compelled to publicly disclose our identity and the
fact that we have made a substantial premium offer. Accordingly, we have issued
the attached press release.
For reasons we have discussed, we are confident that our offer is far
superior, in terms of value and certainty, to the Company's announced
restructuring plan. In that regard, we again urge you to refrain from disposing
of any assets or otherwise pursuing a restructuring plan that would adversely
affect the premium we can make available to your shareholders. Our offer is not
conditioned upon finalization of your recapitalization plan and we see no reason
to delay. Just as we have honored the economic effect of the recapitalization in
our offer, we would be willing to consider allowing a shareholder approval that
would give effect to the one share/one vote aspect of your proposed
recapitalization.
We are totally committed to moving forward expeditiously. We believe we can
negotiate a mutually satisfactory definitive merger agreement very quickly. We
look forward to working together with you to bring this exciting combination to
fruition.
Sincerely,
/s/ Richard Sands
Richard Sands
Chairman of the Board
and Chief Executive Officer
cc: Members of the Mondavi Board of Directors
Attachment