Evans & Tate-Yarraman takeover sparks intense interest
- Friday 5 January 2007
On 21 December Yarraman made an audacious AU$131m (£52.9m) take-over bid for debt-laden Western Australian producer Evans & Tate.
And observers are most interested the fortunes of Yarraman owner Gary Blom. If the bid succeeds he will be back as a major player just four years after his Barrington Estates company collapsed.
Evans & Tate, which owes AU$90m (£36.38m), has neither approved or dismissed the offer. On 26 December it said, ‘the Board notes that it is not bound by the Yarraman offer, and intends to fully consider and evaluate the offer and provide its view of the offer in due course.’
Yarraman wants a response by 16 January and hopes to complete the merger by April 2007.
Australian entrepreneur Blom started Barrington Estates after his company Cinema Plus collapsed in 2000 owing AU$140m (£56.58m).
Barrington acquired Australian wineries including Yarraman Road in the Hunter Valley, Mount Avoca, Hay Shed Hill, and Haselgrove Wines, but collapsed in October 2002 with debts of at least AU$25m (£10m).
In September 2004 the ASIC (Australian Securities and Investment Commission) banned Blom from running any Australian company for three years.
Blom bought back the Yarraman Estate in the Hunter Valley from the liquidator in 2004 and at the end of 2005 Yarraman Australia become the subsidiary of Yarraman Winery Inc, an American company based in Nevada.
Yarraman has proposed a restructuring of Evans & Tate’s debt through ‘a major New York investment bank’ – thought to be multinational financier GE.
Yarraman wants to expand the merged business, to be named New World Wine Estates, into a global winemaker with operations in Chile, Argentina, New Zealand and the US.
Yarraman Winery Inc has its own financial problems. Its last quarterly report filed with the SEC (Securities & Exchange Commission) indicates its survival is in doubt.
‘The Company has suffered recurring losses from operations, cash deficiencies and the inability to meet its maturing obligations without borrowing from related parties and sale of its stock. These issues may raise substantial concern about its ability to continue as a going concern,’ the report said.