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(Sharecast News) - Tilray Brands is close to agreeing a 40m deal to acquire most of BrewDog in a cut-price takeover that will be executed through a pre-pack administration, according to a report from Sky News on Monday.
The US cannabis and consumer packaged goods group was expected to buy BrewDog's core brands, its main brewery in Ellon, Scotland, and its operations in the US and Australia.
Some additional UK assets would be included, although a number of the company's British bars would not form part of the transaction, industry sources told Sky.
The process was being coordinated by AlixPartners, which is set to be appointed administrator, with completion subject to court approval.
The reported price of about 40m was likely to surprise investors given BrewDog's previous valuation.
In 2017, private equity firm TSG Consumer Partners acquired a 21% stake in a deal that implied a valuation of at least $1bn.
Preference shares held by TSG could give it first claim on sale proceeds, Sky said.
Tilray was understood to have beaten rival bidders including C&C Group, owner of Magners and Tennent's, Danish brewer Royal Unibrew, and BrewDog co-founder and former chief executive James Watt.
The deal was expected to leave so-called 'retail punks' - customers who invested roughly 75m in equity crowdfunding rounds between 2009 and 2021 - unlikely to recover their money.
One source told Sky that sums owed by trade customers, amounting to millions of pounds, were expected to be paid in the coming weeks.
Founded in 2007, BrewDog grew into one of the most prominent names in British craft beer, with brands including Punk IPA, Elvis Juice, Hazy Jane, Wingman and Lost.
The company said it produces five of the UK's top eight craft beer brands and holds a 4% share of the UK off-trade grocery market by value.
It operates 72 bars globally, including in London and Las Vegas, employs around 1,400 people and runs four breweries in Scotland, the US, Australia and Germany.
However, the group had recently struggled financially - it reported a 37m loss last year on turnover of 357m.
Five years ago, it was also hit by allegations from dozens of former employees that it fostered "a culture of fear".
BrewDog's bars were reportedly closed on Monday as the future of the company was being finalised, with neither Tilray nor BrewDog commenting on the reports.
Reporting by Josh White for Sharecast.com.