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McGuigan in takeover bid speculation

The future of Australia’s second-biggest listed wine company is the subject of fevered rumours as share prices continue to climb.

Shares in McGuigan Simeon, the Sydney Morning Herald reports, have climbed AUS$0.82 – or 41% – since 15 September.

That includes a rise of AUS$0.30 to AUS$2.80 in the last 24 hours as speculation mounts that a US wine group could be gearing up for a AUS$300m takeover bid.

McGuigan itself remains tight-lipped as to the reasons for the share price surge.

‘There is no explanation that the company may have for the price change and the increase in volume in the securities of the company,’ a spokesman said.

And chief financial officer Michael Noack told the Herald, ‘We’ve got no idea what’s going on.’

Two US companies are suggested as possible buyers: E&J Gallo, the world’s second biggest wine company after Constellation Brands, or The Wine Group.

Sonoma-based Gallo is the US distributor of McGuigan’s Black Swan range and holds a 2.45% stake in the company.

San Francisco-based The Wine Group, America’s third-largest seller of wine, recently bought Australian Mildura from Evans & Tate for AUS$8m.

American fund managers such as Morgan Stanley, Schroder Asset Management, and Maple-Brown Abbott all have stakes.

The Melbourne Age, which reported that shares had ‘got a real wriggle on’ recently, said McGuigan’s valuation had dropped from about AUS$700m in its heyday to as low as $227m.

But cashflow is strong and the company is in good shape. ‘Just what a takeover merchant would like,’ the newspaper noted.

Written by Decanter staff

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