Jarvis halfway to $200m deal

DARRELL Jarvis has reached the halfway point in his drive to create a $200 million wine company, following two more Margaret River purchases.

Two deals worth almost $30 million will see his public company Margaret River Wine Production secure control of Amberley Estate and Rosabrook Estate.

The money for the deals largely came from UK-based investors which have stumped up as much as UK200,000 pounds each to take equity in MRWP, the parent company of Palandri wine operation Mr Jarvis launched just under two years ago.

Mr Jarvis told Business News the plan was merge Amberley and Rosabrook together to create a stand alone division under the MRWP umbrella – ruling out speculation of it being subsumed into the main business to create a “Palamberley”.

In fact, it was likely Amberley would have its own managed investment scheme to raise funds mainly for increased sales and marketing.

But he said the Amberley deal was not a fait accompli, with only a verbal agreement with Amberley’s biggest shareholder, former PricewaterhouseCoopers accountant Mark Turner, and other stakeholders to acquire a controlling interest in the winery.

The price, around $25 million, is understood to have been recom-mended to the small register of shareholders by directors.

The Rosabrook deal will see its owner become a shareholder in MRWP in a cash and scrip deal worth about $4 million.

Mr Jarvis makes no apologies for moves which have attracted controversy. He believes his latest purchases – following $2.5 million for Baldivis last year – are all part of a wine industry restructuring.

“It initially restructured around flavour, now it will restructure around capital,” he said.

“There is an undersupply of working capital. They (wine-makers) have shifted from whites to reds and moved up the quality scale, that requires more working capital.”

“The game has changed, don’t shoot the messenger.”

The former Heytesbury chief executive has not ruled out further purchases as he moves to take his company to a market capitalisation he believes is necessary for a float.

Part of that rise, he believes, will come from a rerating as investors realise that the Palandri empire is no longer a tax-effective invest-ment scheme promoter but a wine marketing and distribution busi-ness which will produce as much as 165,000 cases this vintage if the new purchases are included.

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