The Hamilton Spectator's breaking news page reports that Labatt is in negotiations with Lakeport to buy the plucky Hamilton "value segment" brewery. Lakeport CEO Teresa Casciolli was quick to praise the move, highlighting the benefit to shareholders.
Casciolli announced, "The Board and I, as a significant unitholder, believe this is in the best interests of our investors, employees and customers."
I call BS on her latter two considerations. This deal is in the best interest of Lakeport's investors, period.
Labatt, an industry giant with a mature market penetration, gets to scoop up an asset with strong sales and profits in a new market segment, and the Lakeport shareholders get a much better price for their shares than they would on the open market.
It remains to be seen how Labatt would run the Lakeport brand, but we can assume at the least that it will consolidate duplicated functions with its corporate operations, meaning at least some jobs in Hamilton are almost sure to disappear.
Customers will lose access to an independent, local, and accessible company. Lakeport is highly regarded among my beer-drinking friends for its excellent, attentive customer service, but that will likely change under Labatt.
Granted, this will have no or only marginal impact on most customers, but it certainly won't represent an improvement.
All in all, as Casciolli noted, "Labatt's offer represents exceptional value for unitholders and a substantial premium to the recent trading price of our units." And that's pretty much it.
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