Australian Vintage requested a suspension of its shares yesterday (27 May) after merger discussions with domestic peer Accolade Wines broke down last week.

In an announcement on the Australian stock-exchange, the wine group said its share suspension would be followed by plans to raise capital and refinance its debt.

Australian Vintage has been in preliminary discussions over a potential merger with Accolade but said the latter withdrew from these last week.

Accolade Wines’s advisors told Australian Vintage the company was “not in a position to continue discussions further at this time”.

Australian Vintage now expects its net debt by the end of June 2024 to be A$70-75m (US$46.6m-49.9m), compared to a previous estimate of A$43-50m.

The Tempus Two and McGuigan brand owner will release an announcement on its capital-raise and debt-refinancing proposals by 11 June. It said commencing trading would be “materially prejudicial” to its ability to source “critical” funding.

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Contacted by Just Drinks, Accolade said it had no comment on yesterday’s Australian Vintage ASX filing.

While Accolade Wines’s advisors “declined to provide any further detail” on its withdrawal from discussions, Australian Vintage pointed out the guidance came “shortly after” growers rejected a buy-out deal from the Banrock Station brand owner.

The offer, posed to the Riverland region’s CCW co-operative in April, proposed reducing Accolade’s volume requirements under what it called an “outdated and inflexible” contract. Growers rejected the offer at the CCW’s annual general meeting last week (21 May).

Accolade said it was disappointed by the decision “on a number of counts”. “The package was the only measure put forward to date, by any party nationally, to support a difficult, but much-needed industry transition to a more sustainable footing,” a spokesperson said.

Last month, Accolade urged the organisation’s approximately 530 grower members to accept the deal, saying it was the “only option that allows CCW’s growers and Accolade to remain viable”.

Earlier this month, it was reported Pernod Ricard had entered into discussions with Accolade over Pernod’s wine stable in Australia.

Approached by Just Drinks, a Pernod spokesperson said: “We never comment on M&A rumours and so therefore are not in a position to provide any statement relating to this subject.” An Accolade spokesperson declined to comment.

In February, The Australian newspaper named Pernod Ricard’s Australian division as a potential candidate to combine with Accolade, alongside Australian Vintage.