Evans & Tate chairman John Hopkins said today (20 February) that the Australian wine group has yet to see the details of how Yarraman Winery would fund its bid for the company.

In an interview with just-drinks, Hopkins said E&T and Yarraman would enter into a three-week period of due diligence after the two sides agreed on how to move forward with the latest proposal from Yarraman.

Following a series of offers and counter-offers, E&T and Yarraman have made an initial breakthrough in negotiations. Yarraman's latest bid - its third offer - values E&T at A$148.3m (US$116.5m) and would see it take a majority stake in the enlarged company.

Hopkins called the 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.

Yarraman said it has secured financial backing from US conglomerate GE to cover E&T's debts, which include some A$90m owed to ANZ Bank. "That's the general idea but we haven't seen the terms of that as yet," Hopkins said.

No details have been given about Yarraman's latest offer but its second bid, which was tabled on 1 February, would have seen ANZ Bank receive A$80m in cash and A$17.3m worth of shares in the enlarged company. E&T turned that offer down last week.

Should Yarraman's offer prove successful, Hopkins said he hoped the enlarged company would create a "New World wine player in the premium sector". However, he added: "As far as a business plan goes, we'll have to get that developed post-merger."

The two sides have been jostling for position since December when Yarraman first made an unsuccessful approach for E&T.

Hopkins revealed that there had been rival interest in E&T but said none of the potential suitors would have "delivered the enterprise value we were looking for".

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.

Officials at Yarraman, which is listed on the NASDAQ but has vineyards in Australia's Upper Hunter valley, could not be reached for further comment as just-drinks went to press.