NEW YORK (AP) -- Shares of Central European Distribution Corp., parent company of vodka maker CEDC International, soared Thursday after Russian Standard Corp. offered to boost its stake in the company.
CEDC shares jumped 93 cents, or 18 percent, to close at $6.04, after peaking at $6.48 earlier in the day. It was one of the day's biggest gainers on the Nasdaq stock market.
Mount Laurel, N.J.-based CEDC said its board received a letter from Russian Standard, which is one of Russia's top makers of premium vodka and also owns a bank, offering to acquire an additional 19.9 percent of the company's outstanding shares through the issuing of new shares and to help it restructure its debt.
In exchange, privately held Russian Standard would get the assets of Russian spirits importer Roust Inc.
Russian Standard and its majority shareholder and chairman, Roustam Tariko, together already own an about 9.9 percent stake in the company.
CEDC said it has taken part in preliminary discussions with Russian Standard about a possible investment, but that no agreement has been reached. The company said its board will evaluate the proposal and act in the best interest of its shareholders.
The offer prompted Jefferies analyst Alex Howson to boost his rating for CEDC to "Buy" from "Underperform" and more than quadruple his price target to $6.80 from $1.50. He said that because the additional shares would be newly issued, Russian Standard would end up with an about 25 percent stake in the company.
"We take the view that Russian Standard is a highly credible investor and that its involvement is game-changing for CEDC," Howson wrote in a note to investors. "On this basis we expect an agreement in some form to be reached between the two companies."
Since the beginning of this year, CEDC's shares have lost about 78 percent of their value.
The analyst added that Russian Standard's expertise both in finance and vodka makes it an "ideal investor" for CEDC.
- Russian Standard