Beam's Vodka Shot Sobers M&A Speculation

(Beam acquisition story, updated to reflect additional analyst comments and additional data)

NEW YORK (TheStreet) -- William Ackman's favorite market drink, whiskey maker Beam(BEAM) , is buying vodka and rum brands from privately held spirits company White Rock Distillers, a deal that nearly doubles Beam's presence in the Vodka market and diversifies its top shelf, but could sober up shareholders betting that a takeover offer is coming.

Beam's acquisition of the fast-growing Pinnacle Vodka brand and a line of flavored rums called Calico Jack's, is the whiskey maker's biggest move so far as a stand-alone purveyor of spirits. Beam was spun out of Fortune Brands (FBHS) in mid-2011.

The $605 million acquisition may dim speculation that the maker of Jim Beam and Makers Mark whiskey can be acquired by a spirits giant like Diageo (DEO) , market chatter that began after the 2011 spinoff.

"With Diageo widely considered to be the most likely acquirer, this purchase presents another hurdle in terms of a take-out, in our opinion, as BEAM's larger stake in the vodka category creates another area of overlap with Diageo (the market share leader in the U.S. vodka category)," wrote Citigroup analyst Geoffrey Small in a Monday research note.

If a recent shot of premium in Beam shares wasn't justified by the likelihood of a takeover, the deal could be the beginning of headwinds for the company's stock.

"The company's shares have been driven up well above their fundamental value, in our view, by bid speculation," wrote Ian Shackleton of Nomura Securities in a Monday note. Such a deal with Diageo is likely off the table because, "Diageo would not be allowed to keep the Pinnacle brand, we believe, given its already high share of U.S. vodka."