AUS: E&T sees one bid improve, one bid drop
A busy week at Evans & Tate has seen Yarraman improve its bid for the wine company, and Ferngrove drop its interest altogether.
E&T confirmed yesterday (24 July) that Yarraman has returned with a third offer for the company, in which E&T will acquire the Australian arm of the US-based company for around A$17m (US$15.02m). The acquisition will be run through in the form of the issuance of E&T shares at A$0.11 each.
ANZ Bank, which is owed around A$100m by E&T, will see the debt repaid with A$65m in cash and A$20m in the A$0.11 shares. A capital raising of A$20m will also take place, should the bid be accepted, through the issuance of 1-for-1.6 issue to all shareholders at A$0.05 per share. Around A$10m of this will then be used to pay off a further chunk of the ANZ debt.
Yarraman has arranged for GE to provide a debt finance package of A$72m to the merged entity, with A$53.5m of this going to ANZ and the remaining A$18.5m being held for a working capital facility.
E&T said its board will consider the offer, which is subject to satisfactory due diligence.
Earlier today, meanwhile, E&T confirmed that a separate offer, made by Ferngrove Vineyards last month, has been withdrawn. Ferngrove had proposed a merger, in return for the issue of 413.33m shares to Ferngrove. The proposed merger would also have seen ANZ convert $45m of its debt into 409.09m shares at 11 cents each.
Yarraman started its courtship of E&T late last year, when it made a bid, thought to be worth around A$131m, for the Australian company. When this was dismissed, Yarraman returned in February with an improved offer valuing E&T at around A$148m. Again, E&T turned this down, and terminated discussions in March.
Last month, ANZ teamed with Pendulum Investor Group to draw up a financial restructure proposal for E&T. The plan would see ANZ take a 64% stake in E&T in return for erasing A$45m of the A$100m debt owed by the winemaker. Pendulum will then buy half of ANZ's shares for an undisclosed sum, after which E&T will raise $16.7m in capital through a rights issue to be fully underwritten by ANZ and Pendulum.
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