Analysts say Labatt sale is assured; but Labatt looking for "white knight." (John Labatt Ltd.)

Financial analysts quoted in the May 22 edition of the Wall Street Journal said that the Onex takeover of Labatt seems likely to succeed. The analysts speculated that company shareholders, disgruntled by a sluggish stock price, may accept the bid.

Management continues to resist the takeover, urging shareholders not to tender their shares to the Onex takeover bid. In a statement, Labatt called the offer "unrealistically low" and said that it "appears to be a course designed to low-ball a bid and steal the company from our shareholders."

But shareholders may not heed this warning, said analyst Michael Palmer. The Journal quoted him as saying, "The management has no support from shareholders...the company is gone...it's just a matter of the board maximizing values."

Labatt does not have a "poison pill" in place to thwart the Onex bid, but the company is said to be searching for a "white knight" to provide a higher offer.

One of the top "white knight" candidates is Anheuser-Busch (Labatt already brews Budweiser under license in Canada). In addition to providing A-B with a huge chunk of the Canadian market, owning Labatt would also give it a 22% stake in Mexico's FEMSA and control of the Latrobe Brewing Co. in Latrobe, PA (brewers of Rolling Rock, the booming specialty brand). Labatt also owns Italy's Birra Moretti. Other potential white knights include the Miller Brewing Co. and Carlsberg AS.