Accourding to "three people with knowledge of the matter", Bloomberg is reporting that Diageo is in negotiations for a $2 billion bid with the Beckmann family for Jose Cuervo. This deal has long been speculated, but Bloomberg says that they are now in "exclusive discussions", and Diageo has the right of first refusal "because of its international distribution rights to the brand." While most spirits companies sell in the 13 times EBIDTA, a $2 billion deal would suggest 16 times EBIDTA, pretty rich indeed. While the Beckmann's are leaning toward a sale, the family has not completely committed, says the Bloom. Also, Diageo hasn't formally hired bankers, and don't forget Pernod-Ricard is waiting in the wings. Also, the spinoff of Beam leaves Sauza as a backup option for Diageo, although Beam has repeatedly said it can and will remain an independent company.