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Archive for Saturday, March 6, 1999

MCDONALD BEVERAGE SALE DETAILS TRICKLE OUT

March 6, 1999

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Classic Eagle Distributing paid nearly $500,000 for the right to buy Lawrence-based McDonald Beverage, documents show.

When it came time for McDonald Beverage to sell its family business, brewing giant Anheuser-Busch Inc. picked a buyer, set the sale price, then charged the purchaser nearly a half million dollars for the privilege.

According to a recent government filing, Classic Eagle Distributing LLC paid Anheuser-Busch $479,000 for being selected to purchase Lawrence-based McDonald Beverage.

That sum doesn't include what Classic Eagle -- a company with strong ties to Anheuser-Busch -- paid for the business, which distributes Budweiser products in Lawrence and the surrounding area. The sale price has yet to be disclosed.

But information made public when Anheuser-Busch filed a preliminary proxy statement with the Securities and Exchange Commission sheds some light on the deal, which both buyer and seller have declined to discuss.

According to the document, the St. Louis-based brewer entered an agreement last year with McDonald Beverage that gave Anheuser-Busch "the right to select the purchaser of this wholesaler and determine the price of such a purchase."

It picked Classic Eagle, an outfit with which it was familiar. The company is owned by Byron Duncan, a lifelong resident of Johnson County. But Duncan's son, David, is sales manager at Classic Eagle. He spent 16 years in various sales capacities at Anheuser-Busch. Kirk Lambright, Classic Eagle's administrative manager, has held various positions at Anheuser-Busch over the past 11 years. Most recently, he was associate general counsel.

Lambright is the son of Stephen K. Lambright, vice president and group executive at Anheuser-Busch. And David Duncan and Kirk Lambright are cousins.

After paying $479,000 for its selection, Classic Eagle completed its purchase of McDonald Beverage on Dec. 22.

According to the filing, Anheuser-Busch "determined a price for this purchase consistent with its appraised prices for other ABI wholesalers of similar size and operating conditions."

McDonald, Classic Eagle and Anheuser-Busch have declined to disclose that price. But based on industry chatter about similar deals, Anheuser-Busch likely set the price near $2.5 million, insiders say, far less than what the wholesaler could fetch on the open market.

An Anheuser-Busch spokesman declined to comment on speculation over the price or other details in the government filing.

Apart from the mystery surrounding it, the sale aroused interest in Lawrence because of McDonald's long history with Anheuser-Busch. The business had been in the McDonald family for three generations.

Classic Eagle distributes beer in six northeastern Kansas counties: Anderson, Atchison, Douglas, Franklin, Jefferson and Leavenworth.

-- Richard Brack's phone message number is 832-7194. His e-mail address is rbrack@ljworld.com.

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