Golden State Vintners has announced today that it has signed an agreement which will see The Wine Group acquire GSV at a cash price of $8.25 per fully diluted share - valuing the deal at US$111m.

The announcement comes after a takeover battle for the supplier of wines and winemaking services between the Wine Group and a group led by GSV's chief executive Jeffrey O'Neill called O'Neill Acquisition Co.

Under the terms of the Wine Group deal each outstanding share of GSV's Class A and Class B Common Stock will be entitled to receive merger consideration of $8.25 per share in cash.

The transaction value is approximately US$111m, consisting of an equity valuation of approximately US$82m and total debt (as of December 31, 2003) of approximately US$29m.

The Merger Agreement includes a "fiduciary out" provision and a "break-up fee" of US$1.8m plus reimbursement of up to US$500,000 of transaction expenses payable in certain circumstances upon exercise of the fiduciary out.

GSV said it had notified O'Neill Acquisition Co. that it had terminated the amended and restated plan and agreement of merger with the O'Neill Group, dated April 14, 2004.

GSV's board of directors, based upon the unanimous recommendation of a Special Committee of the board of directors, unanimously approved the merger agreement with the Wine Group, except for O'Neill who recused himself from the vote.