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Breaking News from CNBC’s Leslie Picker: Constellation Brands Looks at Brown-Forman – Sources

WHEN: Today, Tuesday, May 23rd

WHERE: CNBC's "Power Lunch"

Following is the unofficial transcript of breaking news from CNBC's Leslie Picker on "Power Lunch" (M-F, 1PM-3PM ET) today, Tuesday, May 23rd. Following is a link to Leslie's story on CNBC.com: http://www.cnbc.com/2017/05/23/constellation-brands-made-offer-to-buy-brown-forman.html.

All references must be sourced to CNBC.

LESLIE PICKER: WE'RE HEARING THAT CONSTELLATION BRANDS HAS MADE AN APPROACH TO ACQUIRE JACK DANIELS OWNER BROWN-FORMAN. THIS IS ACCORDING TO SEVERAL PEOPLE WITH KNOWLEDGE OF THE MATTER. WHILE CONSTELLATION BRANDS SAID IT WAS INTERESTED IN PURCHASING BROWN-FORMAN, BROWN-FORMAN SAID IT WAS NOT INTERESTED IN SELLING, BUT PASSED THE IDEA ALONG TO THE BOARD THE PEOPLE SAID. CONSTELLATION BRANDS, HOWEVER, IS STILL INTERESTED ONE OF THE PEOPLE SAID. THE BROWN FAMILY, WHO ARE FIFTH GENERATION OWNERS OF BROWN-FORMAN, OWN A MAJORITY OF THE VOTING POWER AND HISTORICALLY SAID THEY WANT THE COMPANY TO REMAIN INDEPENDENT. NOW, SHARES OF BROWN-FORMAN HAVE GAINED 12% OVER THE LAST WEEK AS RUMORS ABOUT THE COMPANY BLED INTO THE MARKET. A REPRESENTATIVE FOR BROWN-FORMAN DECLINED TO COMMENT, A REPRESENTATIVE FOR CONSTELLATION BRANDS DID NOT IMMEDIATELY RESPOND TO A REQUEST SEEKING COMMENT. BROWN-FORMAN WITH A MARKET CAP OF AROUND $22 BILLION OWNS ALCOHOL BRANDS LIKE JACK DANIELS, WHILE CONSTELLATION BRANDS OWNS CORONA AND SVEDKA VODKA. BACK TO YOU.

MELISSA LEE: LESLIE, WE ARE ALSO SEEING CONSTELLATION BRANDS STOCK SPIKE WHICH IS REALLY TELLING IN TERMS OF WHAT INVESTORS THINK ABOUT THIS POTENTIAL COMBINATION. ANY IDEA ON WHETHER OR NOT, I MEAN, BASED ON THE BALANCE SHEET, CONSTELLATION WOULD USE STOCK OR CASH?

PICKER: IT'S UNCLEAR EXACTLY WHAT THEY ARE THINKING AT THIS TIME IN TERMS OF THE CURRENCY BY WHICH THEY WOULD PAY FOR THIS. BUT IT'S CERTAINLY SOMETHING THAT THEY ARE THINKING ABOUT. THEIR MARKET CAPS AREN'T TOO DISSIMILAR. SO I WOULD PRESUME THAT THEY WOULD HAVE TO USE SOME COMBINATION, BUT IT'S UNCLEAR EXACTLY WHAT THEY ARE THINKING AT THIS TIME.

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