21/06/2005 - 22:00

Xanadu follows predictable path

21/06/2005 - 22:00


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It’s a tough life at the top of business at the best of times. It’s even tougher when things aren’t going well and pesky journalists keep asking well-informed questions.

Xanadu follows predictable path

It’s a tough life at the top of business at the best of times.

It’s even tougher when things aren’t going well and pesky journalists keep asking well-informed questions. Like earlier this year, when we were asking – based on strong market information – if ailing winemaker Xanadu Ltd had put its icon Margaret River premises on the market.

There were denials all round.

Soon afterwards the group sold a small Margaret River vineyard, not the old Chateau Xanadu property, which some sources in the company tried to imply was the reason for the speculation surrounding the major property.

At that stage, Xanadu chief Sam Atkins maintained that the Xanadu property was not for sale. Here is an extract from WA Business News from a story in February:

‘Mr Atkins denied market speculation that the key Margaret River assets of Xanadu, valued at about $25 million in the books, were on the market.

‘Instead, he confirmed that a third party had been retained some time ago to analyse the numerous unsolicited bids that came in for the property, which is the closest to Margaret River’s township.

‘He had received three or four offers since taking the helm of Xanadu a little over a year ago and decided to avoid wasting management time of what turned out to be “tyre kickers”.

‘“If someone comes along and shows interest, real interest, we will always consider that offer as professionally as we can,” Mr Atkins said.

‘“It would be interesting if someone put a value on it, that would make my life easier.”’

Well it seems they did. This week it was revealed that $26 million, very close to the amount revealed in our story, was the sale price to a company associated with fertiliser chief Doug Rathbone.

I guess we could give Xanadu the benefit of the doubt, and propose that it was our story that prompted the offer from Mr Rathbone. Hard to believe, though, especially when the group’s South Australian assets were flogged in the meantime.

In addition, the three Xanadu asset sales combined are not monumentally off the $40 million figure we had put to Xanadu at the beginning of the year. Clearly, that is what was sought, though the final figure falls a few million dollars short of that price tag.

For all intents and purposes it looks like a fire sale has been taking place for some time – starting with the bundle of assets and then divided into individual lots, with lowest priced assets selling first and leading up to Xanadu’s icon property and original reason for existing.

I’d prefer to give business people the benefit of the doubt when we follow up a rumour and they deny it.

But in our experience we are better off to run with the speculation and the response from the company, rather than suppress something which typically turns out to be true.


Power and influence in WA business

This week’s edition contains one our toughest and yet most enjoyable assignments – to determine who are Western Australia’s most influential.

Of course, as a business newspaper, we come at it from a business perspective, but we try to include all walks of life in what we regard as influential.

Right now, with the economy in boom mode and an increasingly pragmatic and economically minded Labor government – the influence of business is stronger than ever before.

Near full employment is what every government is striving for; it brings in the dollars and silences the worst of public opinion. And in this day and age, only business can really deliver that.

Of course, government is integral to that in allocating resources and allowing developments to get past bureaucracy – and that is why they remain at the helm of influence.


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