CEDC Withdraws From Nemiroff Acquisition

Analysts at Deutsche Bank reiterate their "buy" rating on Central European Distribution Corp CEDC. The target price for CEDC is set to $36. According to Deutsche Bank, “CEDC announced that it has withdrawn from the second round of tender regarding Nemiroff, a leading Ukrainian vodka maker. CEDC has announced it intends to use the proceeds from the Polish distribution assets disposal (PLN 400m, or USD 123m) for a share buyback, acceleration of call option on Whitehall minorities, and debt reduction.” “We believe the major reason for withdrawing from the acquisition was the need for in-depth restructuring of the Ukrainian assets. According to CEDC management, due diligence indicated that Nemiroff would require 3-5 years of restructuring to reach the proper structure….Given CEDC's track record of expensive acquisitions, we find the company's decision not to continue the dilutive deal as positive,” the analysts mention. Deutsche Bank adds, “With the Nemiroff case aside CEDC management can fully focus on restructuring Russian operations and winning back market share in Poland. Further, the proceeds from Eurocash should allow the company to reduce leverage, improving its risk profile.” More Analyst Ratings here