PARIS (Bloomberg) <\m> Remy Cointreau SA, Europe’s fifth- largest liquor producer, said first-half profit increased 77 percent as it sold more cognac and champagne.

The shares rose to the highest in more than 16 years after Dominique Heriard-Dubreuil, Remy’s chairwoman, told a press conference that a possible sale of her family’s majority stake was “a question for the future.” She ruled out Remy being acquired through a hostile takeover, citing family control of the shares.

The Wall Street Journal reported yesterday that if Remy was put up for sale, Bermuda-based Bacardi would be among the likely bidders, along with Jack Daniels maker Brown-Forman and European drinks giants Diageo and Pernod Ricard.

“Heriard-Dubreuil’s comment confirmed what has been on everyone’s mind,” said Laetitia Delaye, an analyst at Kepler Equities in Paris. “It’s also the quality of the results that moved the shares,” said Delaye, who rates Remy stock a “buy.”

Net income at the Paris-based company rose to 75.7 million euros ($100 million) in the six months ended September 30 from 42.9 million euros a year earlier. Remy, which yesterday repeated its forecast for a gain of at least ten percent in full-year operating profit, has sold the Bols liquor unit in Hungary and ended wine and duty-free distribution to concentrate on upscale brands such as Remy Martin cognac and Piper-Heidsieck champagne.

Shares of Remy rose as much as 3.16 euros, or 6.9 percent, to 48.7 euros in Paris and were at 48.10 euros as of 1:56 p.m. local time, giving the company a market value of almost 2.2 billion euros. A close at that level would be the highest since Aug. 31, 1990.

The stock has risen nearly 21 percent this year, compared with gains of 12 percent by Pernod Ricard SA and 18 percent by Diageo Plc, the world’s largest liquor producer.

Remy last month withdrew from its Maxxium distribution joint venture with Fortune Brands Inc. to gain more control over distributing its cognac and champagne in Asia. It said today it will pay about 240 million euros by 2009 to end the agreement.

“Regardless of the financial impact of the exit from Maxxium, we suggest a significant barrier to M&A activity has been removed,” Simon Hales, an analyst at JPMorgan Chase & Co., wrote in a Dec. 5 note. He has a “neutral” rating on Remy.

“We are creating a strategy of value rather than a strategy of volume,” chief executive officer Jean-Marie Laborde said at the press conference. “Remy Cointreau opted for a niche strategy on premium market and the strategy is bearing fruit.”

Remy said its champagne unit performed particularly well as it sold more Piper-Heidsieck at higher prices. Profit from continuing operations rose almost 49 percent, the company said.

Laborde said champagne has sold well in the holiday season. “In champagne everything happens during the last three months of the year,” he said. “So far the figures are very good indeed.”

Remy Martin led growth in sales of premium cognac brands, with profit from continuing operations increasing 38 percent. Sales by volume decreased four percent as the company focused on pricier brands with higher profit margins.

Profit in liquors and spirits rose nine percent on that basis, fuelled by Cointreau. The orange-flavoured liquor, repackaged in a blood-red bottle, sold well in the US because of the new “Be Cointreauversial” advertising campaign, Remy said.

The company’s profit for the period included gains of 42.1 million euros from divestments, including a March, 2006 disposal of Dutch and Italian liqueurs and the sale of Cognac de Luze and Bols in Hungary in July, Remy said in the statement.

Maxxium Worldwide BV was formed in 1999 by Remy, Scottish distiller Edrington Group Ltd and Fortune, the maker of Jim Beam whiskey, aiming to secure sales as rivals expanded through mergers. Maxxium currently generates 43 percent of Remy’s sales. Remy, the maker of Louis XIII cognac, said it wants to have total control over all its brands in China and southeast Asia.

“The market dynamic has changed, and Remy’s portfolio has changed as well,” Laborde said. “Our sales in China are still much lower than they could be.”

Laborde said a “colossal” surge of cognac consumption in China, Vietnam, Malaysia and Indonesia prompted the company to consider its own distribution network geared toward high-premium brands. Remy will start replacing the 200-strong Maxxium network in China with its own distribution team immediately, the CEO said. Remy expects to increase its Chinese sales force, which will be “in order of hundreds,” Laborde said.

The company might consider keeping Maxxium arrangements in some countries. Most distribution deals will be negotiated country by country, Laborde said, citing Russia as an example. Revenue in that country has more than doubled as customers snap up expensive cognac and champagne, according to the executive.