Jack Bendat-linked Ferngrove Vineyards Ltd is eyeing a significant Margaret River acquisition on the back of success from its Great Southern operation.
Jack Bendat-linked Ferngrove Vineyards Ltd is eyeing a significant Margaret River acquisition on the back of success from its Great Southern operation.
Ferngrove chief executive officer Anthony Wilkes told WA Business News that his company had been keen to acquire Evans & Tate, which this week reached an in-principle balance sheet restructure agreement with ANZ Banking Ltd that could see Pendulum Capital Ltd secure 40 per cent of the company.
“We expressed an interest in them during the last six to nine months,” Mr Wilkes said.
Mr Wilkes said the winery had run the ruler over several Margaret River businesses in the past three to four months.
“We are a big believer in branding WA and we want to play a leading role in that,” Mr Wilkes said.
“We are looking for a Margaret River wine business that would be a complimentary fit to our existing business.”
E&T’s board has left the door open to competing offers for the company despite its in-principle agreement to ANZ’s restructure proposal, which involves issuing the bank about 430 million shares in return for its bank debt almost halving to $55 million.
The E&T board told investors that it would “continue to examine all alternate offers for the restructure of the company.”
Mr Wilkes was tight-lipped about whether Ferngrove would renew discussions with E&T, only to say the group was keen to expand its position in the WA wine industry.
The winery’s second biggest investor after founder Murray Burton, Jack Bendat, told WA Business News that he was not currently interested in investing in E&T.
Mr Bendat, who developed and sold Goundrey Wines, said ANZ had to “get real”, realise the net worth of E&T and forgo some of winery’s debt without taking equity in the company.
Under the restructure deal announced earlier this week, ANZ will emerge with about 22 per cent of E&T’s issued capital but could end up with as much as 40 per cent if it is required to make up a shortfall in the proposed $16.7 million non-renounceable rights iss-ue, which it is underwriting together with Pendulum.
Mr Bendat underwrote Fern-grove Vineyards Ltd’s $10.2 million rights issue two years ago, and at the time offered to invest in E&T if it “got their act together” and the underwriting was on a “solid basis”.
Pendulum, which will buy about 215 million E&T shares from ANZ for an undisclosed sum, is acting for a group of investors, which includes Mr Fogarty who is reportedly taking a stake of no more than 20 per cent.
WA Business News understands that Yarraman is putting together a fresh takeover offer for E&T.
Mr Wilkes said Ferngrove’s business was continuing to strengthen, especially off the back of semillon sauvignon blanc sales.
He said sales of Ferngrove wine and its sister brand Leaping Lizard had increased by 30 per cent in the past year.
According to its most recent accounts lodged with the Australian Securities and Investment Commission, the winery’s revenue increased to $7.7 million in the six months to December 31, up from $7.3 million in the previous corresponding period.
However, the group’s losses widened from $841,455 to $1.3 million.
The company said it had struck a bulk wine supply contract with Foster’s Wine Group, which would account for 60 per cent of the company’s annual crush.
