Evans & Tate has outlined the terms of the latest takeover bid from Yarraman Winery as the two companies embark on a period of due diligence.

In a statement to the Australian Stock Exchange today (22 February), E&T gave details of Yarraman's proposal to which the Australian wine group has given "tentative" agreement.

Under Yarraman's proposal, E&T shareholders would be given one Yarraman share for every 6.75 of their shares. Yarraman also plans to finance E&T's A$90m (US$70.9m) debt with ANZ Bank with A$80m in cash and A$17.3m in Yarrman preference shares.

Yarraman is in independent talks with ANZ over E&T's debt. The company said the bank has approved its takeover plan "in principle". In all, Yarraman's proposal values E&T at A$148.3m.

Earlier this week, E&T chairman John Hopkins called the company's tentative agreement "a flashing amber light" to Yarraman's plans. He said E&T would study Yarraman's proposal to see if its debt provider is "ready, willing and able" to cover the West Australia-based company's debts.

E&T has had a tough 18 months, announcing a series of losses, write-downs and winery sales as the business was hit by Australia's wine glut.

In December, Yarraman CEO Wayne Rockall told just-drinks he is hopeful an acquisition of E&T would be "the first of several" the company makes throughout New World wine territories.