The deadline for completion of the sale of the Guinness stake in Cantrell & Cochrane to Allied Domecq has been extended. It is understood that the June 23rd deadline has been lifted and that negotiations are now likely to continue for a number of weeks.

Guinness may now be prepared to sell its entire 49.6 per cent stake in C&C, but the outcome will depend on the price Allied Domecq is prepared to pay. Guinness has said that it would retain a stake of just under 10 per cent in C&C unless Allied Domecq offered an amount in excess of the valuation that KPMG has placed on its holding.

Following the Competition Authority ruling that allowed Guinness to go ahead with its £33 million takeover of United Beverages on condition that it reduced its stake in C&C to a maximum of 10 per cent, Allied Domecq had until June 23rd to decide whether to exercise its option to buy the Guinness C&C stake at the KPMG valuation price.

KPMG is understood to have valued the Guinness holding at between £260 million and £270 million and the 39.6 per cent stake that must be sold to meet Competition Authority conditions at around £220 million. Guinness is understood to be less than happy with the KPMG valuation and appeared to be prepared to retain the 10 per cent stake in the expectation that its value would be enhanced if Allied Domecq floated C&C on the stock market.

Market sources expect that if Allied Domecq takes control of C&C, it will move quickly to demerge the business from its global drinks business and float the Irish company on the Dublin and London stock markets, retaining a majority stake.