Wine company Delegat's Group has made a play for the 45% of Oyster Bay Marlborough Vineyards it does not already own.
Delegat's, majority-owned by Jim Delegat, has offered to pay $1.80 for each Oyster Bay share, with a alternative scrip offer for Australian and New Zealand shareholders of one Delegat's Group share for every Oyster Bay share.
The offer values Oyster Bay at $16.2 million and is outlined in a notice of intent for full takeover lodged with the NZX today.
Oyster Bay shares last traded on the NZAX at $1.60.
The formal offer under the terms of the Takeovers Code is expected to be made on November 2.
Oyster Bay has set up a committee of directors who are independent of Delegat's - Sandy Maier, Ruth Richardson and Mark Peters - to act for Oyster Bay and prepare the target company statement.
The committee has not made a recommendation to shareholders in relation to the Delegat's offer, reserving its formal recommendation for the target company statement.
In the meantime, the committee has appointed Grant Samuel & Associates to prepare an independent adviser's report and First NZ Capital to provide commercial advice.
Oyster Bay is a leading premium wine here and in Australia, the UK and Irelend and the brand is gaining momentum in Canada and the US.
A market update in April 2010 warned the company was likely to operate at a loss for the 2010 financial year due to low grape prices and, as a result, could fail to meet its banking covenants.
A waiver of these covenants for the 2010 financial year was subsequently granted by Oyster Bay’s bank and in June the company’s directors commissioned First NZ Capital to advise on the most effective capital structure for the company.
Key findings of that report will also be disclosed in the target company statement.
In August, Oyster Bay revealed a net operating loss of $841,000 for the 2010 financial year, and a net loss after tax of $13,820,000 – after accounting for non-cash adjustments required by NZ IFRS.
Delegat's latest financial result showed a 17% fall in full year operating net profit to $18.9 million as global sales reached record levels but revenue was affected by the value of the New Zealand dollar.
Mon, 18 Oct 2010