Yarraman bids for Evans & Tate, proposes name change

Sydney-based Yarraman Winery has launched a takeover bid for Evans & Tate after striking a deal with former executive chairman Franklin Tate to buy a 19.9 per cent stake in the Margaret River producer.

Yarraman, which is listed on NASDAQ's secondary market in the US, has revealed it had entered into a conditional sale deed with Mr Tate's company Grape Expectations Enterprises to buy 18.3 million shares, or 19.9 per cent of E&T's issued capital.

Daily Business Alerts flagged the involvement of Yarraman two weeks ago following speculation that a deal with the group might be driving the E&T share price revival.

The sale reduces Mr Tate's holding in E&T from 31.5 per cent to 11.7 per cent.

Yarraman said it had made a formal offer to the E&T board about a potential merger that included offering shareholders one Yarraman share for every nine E&T shares.

Yarraman shares last traded at $US2.35 while E&T's shares last traded at 23 cents.

Based on current trading and exchange rates, the deal represents a 41 per cent premium for E&T shareholders.

Yarraman said that it would rename the merged group New World Wine Estates Inc.

It said E&T's $90 million debt with ANZ would be refinanced in a combination of cash and subordinated notes.

Yarraman chief executive Wayne Rockall said if the offer was accepted by E&T shareholders it would make an application for admission of its shares onto a more senior exchange, either the American Stock Exchange or the NASDAQ.

He said Yarraman would then seek to apply for admission to the Australian Stock Exchange.

WA Business News questioned E&T chief executive Martin Johnson about a possible deal with Yarraman a fortnight ago after its shares surged 43 per cent to 28 cents over three trading days.

At the time, Mr Johnson said that E&T had not struck a deal with Yarraman and that the improvement in the share price may be linked to growing market awareness that the much-talked about wine glut was receding as drought and industry changes reduce the over-supply that has hurt winemakers.

Yarraman said Mr Johnson would be left to control the new wine group as president and chief executive while Mr Rockall would become senior vice president of sales and marketing.

Yarraman operates a 2,500-tonne winery in the Hunter Valley.