Evans & Tate Ltd has rejected a merger proposal by US-backed Yarraman Estates Pty Ltd, leaving Peter Fogarty's Pendulum Capital Pty Ltd's bid as the remaining bid under consideration after Ferngrove Vineyards Pty Ltd withdrew its bid on Wednesday.
Evans & Tate Ltd has rejected a merger proposal by US-backed Yarraman Estates Pty Ltd, leaving Peter Fogarty's Pendulum Capital Pty Ltd's bid as the remaining bid under consideration after Ferngrove Vineyards Pty Ltd withdrew its bid on Wednesday.
In a statement to the Australian Securities Exchange, E&T said it did not consider Yarraman's offer a sufficiently compelling proposition.
The Yarraman Estates bid, made after E&T earlier this year rejected a $148 million takeover proposal by Yarraman Estate's US parent Yarraman Winery Inc, included extinguishing all of E&T's bank debt.
In response to E&T's rejection of its offer, Yarraman Winery Inc director Bill Middleton said he was disappointed by E&T's board decision.
Mr Middleton said Yarraman's "$100 million plus" offer was competitive and compelling and that the E&T board had delivered its decision before it had provided Yarraman with an opportunity to present the details of its offer.
"This offer is backed by one of the world's leading financial institutions, GE Finance, and one of Australia's leading security houses, Patersons Securities Ltd," he said.
He said Yarraman's offer is superior to the other known offer, presented by Pendulum Capital, in all significant areas.
Yarraman's deal included issuing E&T scrip to Yarraman in exchange for its NSW winery facility, which it claims was worth almost $17 million.
Yarraman said it would reduce E&T's debt to ANZ by paying the bank $65 million in cash and $20 million in E&T shares at an 11 cents issue price. Convertible note holders and WInES holders would convert their securities into ordinary shares.
The merger would be undertaken after a one for six rights issue to all shareholders to raise $20 million at 5 cents per share.
The news comes two days after the Jack Bendat-linked Frankland producer Ferngrove Vineyards Ltd withdrew its interest in the E&T business following due diligence.
That decision left Peter Fogarty's Pendulum Capital Pty Ltd and Yarraman as bidders for E&T.
In other E&T news, the company announced its convertible noteholders had passed a resolution approving technical changes to its convertible unsecured note trust deed without amendment.
The full text of two E&T announcements are pasted below
The Board of Evans & Tate Limited (ETW) has met this morning and has rejected the offer of Yarraman Estates Pty Ltd (Yarraman) announced to the ASX on 24 July 2007.
Following an assessment and analysis of the offer it was not considered that it presented a sufficiently compelling proposition for Evans & Tate's business or stakeholders.
The convertible noteholders announcement is pasted below:
Evans & Tate Limited (Evans & Tate; ASX: ETW) today announced that the resolution put to the extraordinary meeting of the Company's Convertible Noteholders (ASX: ETWG) held in Sydney today was passed without amendment having achieved the required 75% approval of Noteholders.
The resolution approved technical changes to the convertible unsecured note trust deed.
The changes were required as a result of a technical breach of the terms of the convertible notes relating to the Company's ratio of assets to liabilities.
Evans & Tate Chairman John Hopkins said he was pleased that Noteholders had approved the changes to the convertible note trust deed.
" There are important decisions to be made as the Company finalises its due diligence on restructure opportunities currently being considered, and Convertible Noteholders have voted in a way which gives Evans & Tate's Board an ability to work towards a conclusion on this long-running matter"