EVANS & TATE REVEALS LATEST TAKEOVER BID
In a statement to the Australian Stock Exchange yesterday, Evans & Tate outlined the latest takeover bid from U.S.-based Yarraman winery, to which the Australian wine group has given a "tentative" agreement.
[Ed. note: Both wineries were adversely affected by the Australian and U.S. grape gluts, respectively, and are now trying to piece together their respective companies.]
According to the Sydney Morning Herald, Yarraman winery’s proposed merger with Evans & Tate will see shareholders for E&T end up with 15% of the combined group. And if E&T shareholders accept the proposal, existing shareholders in the much smaller Hunter Valley winery will end up owning a 23% stake.
In other words, under Yarraman's proposal E&T shareholders would be given one Yarraman share for every 6.75 of their shares. Yarraman said it has secured financial backing from U.S. conglomerate GE to cover E&T’s $70.9 million debt with ANZ Bank, which includes A$80m in cash and A$17.3m in Yarraman preference shares.
Yarraman is currently in independent talks with ANZ over E&T's debt, which the bank has supposedly approved its takeover plan "in principle". In all, Yarraman's proposal values E&T at about $192.4 million.
Yarraman, which will not crush grapes this year in order to clear the oversupply of wine in its cellars, reported a $1.9 million loss for the six months to December. It also suffered an 18% in wine sales to only $836,543. The debt-laden company conceded in its latest filing to the U.S. Securities and Exchange Commission that it may struggle to survive if the deal does not proceed.
At the same time, Yarraman plans to make many more acquisitions in new world wine territories if and when the E&T merger is completed.
Evans & Tate, Australia’s fourth largest winery, has also found itself in a mountain of debt. In the past year and a half, E&T has announced a series of losses, write-downs and winery sales as the business was negatively effected by the Australian wine glut.
[Ed. note: Both wineries were adversely affected by the Australian and U.S. grape gluts, respectively, and are now trying to piece together their respective companies.]
According to the Sydney Morning Herald, Yarraman winery’s proposed merger with Evans & Tate will see shareholders for E&T end up with 15% of the combined group. And if E&T shareholders accept the proposal, existing shareholders in the much smaller Hunter Valley winery will end up owning a 23% stake.
In other words, under Yarraman's proposal E&T shareholders would be given one Yarraman share for every 6.75 of their shares. Yarraman said it has secured financial backing from U.S. conglomerate GE to cover E&T’s $70.9 million debt with ANZ Bank, which includes A$80m in cash and A$17.3m in Yarraman preference shares.
Yarraman is currently in independent talks with ANZ over E&T's debt, which the bank has supposedly approved its takeover plan "in principle". In all, Yarraman's proposal values E&T at about $192.4 million.
Yarraman, which will not crush grapes this year in order to clear the oversupply of wine in its cellars, reported a $1.9 million loss for the six months to December. It also suffered an 18% in wine sales to only $836,543. The debt-laden company conceded in its latest filing to the U.S. Securities and Exchange Commission that it may struggle to survive if the deal does not proceed.
At the same time, Yarraman plans to make many more acquisitions in new world wine territories if and when the E&T merger is completed.
Evans & Tate, Australia’s fourth largest winery, has also found itself in a mountain of debt. In the past year and a half, E&T has announced a series of losses, write-downs and winery sales as the business was negatively effected by the Australian wine glut.
posted at 1:15 PM
<< Home