Chateau Grillet: Why regional players like Guigal or Perrin did not close the deal and why Pinault's offer was the most attractive?

(More wine news on www.vitabella.fr) Maybe the most delicate and precious wine for a luxurious aperitif, Condrieu is unique and, at its best, Chateau Grillet got its reputation for fine minerality that was a perfect pairing for food served at the once 3 star Michelin restaurant La Pyramide from Fernand Point. Those times are over and finally, French billionaire Francois Pinault, through his group Artemis acquired the 3.5ha monopole in the Northern Rhône.

During Chateau Grillet's "down period", Coteau de Vernon from Domaine Georges Vernay took the lead

After Jaboulet - acquired by Frey Family - an other family owned estate (since 1830) has been bought by a non regional investor. A 10,000 bottles production a year, Chateau Grillet is a very small domain which has unfortunately made some very disappointing wines over nearly 20 years (in the 80s and 90s). Sometimes oxydized, sometimes with a lack of precision, Chateau Grillet wines were not delivering what experts could have expected from viognier grapes planted in parcels as prestigious as those from Coteau de Vernon. After Bordeaux consultant Denis Dubourdieu joined in 2001, we perceived the strong efforts made to deliver the best expression of viognier grapes and a work done more particularly on the "reductive side" with a focus on fine minerality gave a renewal to those wines since the 2004 vintage. During Chateau Grillet's "down period", Coteau de Vernon from Domaine Georges Vernay took the lead and got the best scores in Condrieu from the most respected international wine critics.

Luxury comes to a price. Monopole too....

On sale for now some time, we could assume that some big names from the region were keeping an eye on this deal. Next door to the Condrieu AOC, Chateau Grillet forms its own wine-growing AOC and Pinault, who owns and heads the French retail group PPR, was certainly attracted by this monopole status. Investment group Artemis S.A., headed by son François-Henri, has always been keen on building a portfolio of unique wine estates. After first-growth Château Latour in Pauillac and Domaine d’Eugenie in Burgundy, here is Chateau Grillet in Rhone Valley.

Why big regional players did not close the deal?

But why regional big players like Guigal, Perrin or Jaboulet did not close the deal and why Pinault's offer for Chateau Grillet was the most attractive? Simply because potential acquirers did not share the same point of view when they had to consider the valuation of this estate. Regional players are into the Rhone wine business for long years and perceived Chateau Grillet as a key investment for its great terroir to make Condrieu. Roughly, they considered the value of the estate and the parcels. Pinault, who is more into the international luxury business, considered Chateau Grillet as a key investment to acquire a monopole estate that makes a unique wine but also took into account current undervalued intangible assets such as brand asset. And in luxury, brand is key and experienced marketing teams can easily bring value over a couple of years to any wine business with a great history and potential like Chateau Grillet. At this point, the different views of potential acquirers on the future business make a big difference in future sales expectations and profit margins written in 5 years' business plans. This, of course, impacted directly the Net Present Value (NPV) calculated by bidders to make an offer to the family. Looking at Chateau Grillet with "luxury business" lenses while others have "Rhone Valley wine business" lenses can simply make the difference at the end. Well done Monsieur Pinault! (More wine news on www.vitabella.fr)