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AUS/US: Cautious E&T "tentatively" agrees to Yarraman plan

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Australian wine group Evans & Tate has today (20 February) given a "tentative green light" to the latest takeover offer from Yarraman Winery.

Following a series of offers and counter-offers, the two sides have agreed on how to move forward with the latest proposal from Yarraman. The US-listed company's third bid came through yesterday and will see it take a majority stake in the enlarged company.

However, despite this apparent breakthrough in negotiations, a spokesman for E&T told just-drinks that the company has only given a "tentative green light" to the Yarraman proposal.

The spokesman said there would be a "thorough examination of what Yarraman has put forward". He said E&T would study "all aspects of the financing (of the bid) and where (Yarraman's) financial support is".

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 - to which E&T owes A$90m (A$70.3m) - receive A$80m in cash and A$17.3m worth of shares in the enlarged company. E&T turned down that offer last week.

Now, the two companies will enter into a three-week period of due diligence on Yarraman's proposal. The two sides have also agreed that E&T has the right to consider third-party offers for the business.

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

Meanwhile, Yarraman, which is listed on the NASDAQ but has vineyards in Australia's Upper Hunter valley, has been forced to delay the filing of its latest accounts, according to the US Securities and Exchange Commission. Yarraman and its auditors are in talks over "the appropriate treatment of certain presentation issues with respect to the company's financial statements for the six months to 31 December".

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.


Sectors: Wine

Companies: Yarraman Winery

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