Delegat's gets Gravitas in receiver sale

Delegat's Wine Estate has bought the vineyard of failed Marlborough wine company Gravitas for an undisclosed amount.

The 23-hectare vineyard at the corner of State Highway 63 and Lanark Lane was passed in at $2 million when it went to auction last month.

Bayleys Marlborough agent John Hoare said the final sale price, settled on Monday, was confidential. However, it was more than the $2m bid. The property was valued at $3.6m in 2008.

The Gravitas sale was one of only a few vineyard purchases in Marlborough this year, Mr Hoare said.

"Up until 2008, local vineyards sold for more than $200,000 per producing hectare. This Gravitas transaction, albeit a receivership sale, demonstrates that the per producing hectare value is now significantly below this figure."

Many vineyard owners have been closely following the sale of the Gravitas land as a monitor of the market value of grape land he said.

The sale set a grim price that vendors would have to accept, he said.

"We have more than 50 vineyard listings in the region and we expect to see some of those adjust their price expectations downward accordingly as a result of this sale.

"That reality may be hard for some vendors to accept, but, at the end of the day, it's simply where the market is now and anyone trying to talk up values is simply painting a false scenario."

He predicted the drop in prices would see more vineyard sales in Marlborough over the next six months.

Delegat's managing director, Jim Delegat, confirmed his company's purchase yesterday.

The wine giant settled on the property, 19ha of which is planted in sauvignon blanc, chardonnay, pinot noir and riesling vines, on Monday, the same day Delegat's gave notice of a share offer to buy back its struggling grape-growing subsidiary Oyster Bay Marlborough Vineyards Ltd. The offer of either $1.80 a share or a swap for one Delegat's Group Ltd share, is scheduled for November 2. The takeover bid was initiated after Oyster Bay's independent directors approached Delegat's.

Delegat's already owns 54.9 per cent of Oyster Bay.

The takeover is designed to protect Delegat's grape supply and ward off a possible receivership of Oyster Bay which announced an after-tax loss of $13.8 million for the year to June.

The Gravitas label was founded in 1993 by former banker Martyn Nicholls following an extensive search to find land suitable for planting grapes and making high-quality wine. However, the property was placed in receivership with financial management firm Grant Thornton and sold in receivership.