NZ Wineries Face Major Shake-Up

By | 19 May 2000

New Zealand's top three wine companies are all facing major changes in ownership, all revealed in the past week.

Australia's second largest wine company, BRL Hardy announced tonight(Friday) that it plans an offer to take full control of NZ's third largest wine company, Nobilo Wines.

The announcement follows yesterday's announcement by the DB Group, NZ's second largest brewer, that it plans to sell Corbans Wines, NZ's second largest wine company.

Earlier in the week, Lion Nathan, NZ's leading brewer, announced that it had acquired 19.9% of the country's largest wine company, Montana Wines.

BRL Hardy last week lifted its stake in Nobilo from 25% to 40% by buying the shares of an investment group. It now plans to bid for the remaining 60%, offering NZ$1.05 for 35% of the shares and NZ$1.15 for the 25% stake held by the Nobilo family, in recognition of "the strategic nature of their holdings."

The offer values Nobilos, at about NZ$50m.

The company produces about 3.5m litres of wine a year compared with Corban's 9ml and Montana's 20ml.

BRL Hardy's managing director, Stephen Millar, is bullish about Nobilo's prospects, claiming it is NZ's fastest-growing wine company in a market which has the potential to increase its exports by 20% a year.

Millar said today that BRL Hardy would be interested in considering making an offer for Corbans - with a view to merging it with Nobilo.

Analysts are predicting a price of between NZ$130m and NZ$200m for the winery which has had about NZ$37.5m invested in it in the past two years as it attempted to switch from an emphasis on bulk to premium wines, currently running at 60:40.

DB's half-yearly results showed that Corbans had made a loss. Its CEO and chief winemaker have left the company this year.

Southcorp is being tipped as an interested party. So is Foster's although it is understood not to have shown any interest since rumours of a Corban's sale arose earlier this year.

The rumours followed an offer by Singaporean-based APB Breweries for a full-takeover of the DB Group. The offer closed with APB, jointly controlled by Heineken and diversified Singapore group, Fraser and Neave, gaining 75% of shares.

DB managing director, Brian Blake, said the divestment was the finale in the exiting of DB's non-core assets. Blake revealed a half-year EBIT increase of 34% to $NZ31.3m, net profit lifting 11% to $NZ15.2m.

Chris Snow

Companies: Lion Nathan, Foster’s, Heineken

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