The seventh largest investor in Craft Beer Alliance, Midwood Capital Management, has announced that it has delivered a letter to the Directors of the company’s Board highlighting the substantial gap between the Company’s public market trading price and its intrinsic value. Midwood encouraged the Board to pursue a sale of the company either to its strategic partner and largest shareholder Anheuser-Busch InBev, or to a third party.
CBA stock has declined 8% since the beginning of 2017, with both Redhook and Widmer Bros. brands declining significantly in sales.
Anheuser-Busch InBev currently owns 32.2% of CBA and is also the company’s distribution partner. As part of the original deal between ABI and CBA in 2013, ABI has until August of this year to make a qualifying offer to acquire the remainder of CBA or pay a $20 million fee. Midwood stated in the letter that the CBA Board “should absolutely accept it” and “the board should do whatever it can to facilitate ABI making an offer.” And if ABI does not make an offer, the Board should “immediately announce a strategic alternatives process with a plan to sell the company.” The full letter is here.
Boston-based Midwood Capital Management is a private investment fund founded by David Cohen. Midwood manages investment funds which focuses on undervalued, niche-leading companies in the small-cap equity market in the U.S.