Normans conquest

SOUTH Australian winemaker Normans Wines is likely target of a $200 million plus acquisition drive by three Margaret River wineries.

With a market capitalisation of about $12.3 million Normans would be an easy meal for any of the three operators, Palandri, Evans & Tate or Xanadu, which have all indicated that interstate purchases were on the agenda.

Xanadu is considered to be the front runner, confirming Normans was a potential target, while Evans & Tate ruled itself out of contention for the ailing producer which recorded a $10.2 million net loss for the half year ending December 31.

The three WA companies have all created market capitalisation targets associated with levels required to gain interest from institutional investors and the market at large.

Palandri wants to double its size to around $200 million while the other two are seeking a market value of at least $100 million.

Xanadu is driving from the lowest base, set to list next month with a market capitalisation of around $30 million after a recent $8 million raising.

Evans & Tate is keen to jump from its current $50 million, with the founders expressing an interest in diluting their share and raising the liquidity of the stock.

Acquisitions are seen by all of them as the quickest way to reach such goals.

Xanadu managing director Andrew Moore confirmed his company was looking at Normans.

“There are a lot of people looking at it,” Mr Moore said.

“We are one of them.”

“We would need to look to see if it had any synergies.”

Speaking on a marketing trip to New Zealand for the company’s Grolsh beer brand, Mr Moore said he was not actively seeking acquisitions across the Tasman but could not rule out such a move in the future.

“We are open to acquisitions in any of the New World countries, if there were those synergies,” Mr Moore said.

Normans is among Australia’s top 20 producers but has struggled of late, writing down significant sums in relation to its exit from the bulk wine market and $5.8 in other adjustments, including inventory valuations.

The company has publicly stated it was considering a merger with another company and would look to raise capital associated with such a move.


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