Delegat's bid now unconditional

Delegat's Wine Estate has acquired the shareholding it needs to make its takeover offer for struggling grape grower Oyster Bay Marlborough Vineyards unconditional.

Delegat's yesterday announced it had increased its shareholding of the grape grower to 95.22 per cent – more than the 90 per cent it needed to make its takeover offer unconditional.The winemaker would now move to compulsorily acquire the remaining shares it did not own, Oyster Bay chairman Sandy Maier said yesterday. Delegat's offer of $2.08c a share to shareholders closed at 5pm yesterday.

Delegat's owned 54.9 per cent of Oyster Bay when it announced its takeover offer and had increased the price of its bid to $2.08 a share from an initial offer of $1.80.

Those shareholders who had already accepted the Delegat's offer would receive $2.08 cash or one Delegat's Group Limited share for every Oyster Bay share sold, by December 21 2010, Maier said. The remaining shareholders would be given the option of accepting $2.08 cash or one Delegat's share for each Oyster Bay share. Those who do not choose a preference will receive one Delegat's share for every Oyster Bay share they own.

Delegat's gave notice of its $1.80 takeover bid on 18 October, to protect its grape supply and ward off a possible receivership.

Oyster Bay is in breach of banking covenants after reporting a $13.8 million after-tax loss for the year to June 2010 but has a waiver from the bank until the end of this month.

Oyster Bay shareholders were warned that a substantial rights issue could have been necessary if Delegat's did not acquire 90 per cent, to satisfy bankers who had granted a waiver for a breach of banking covenants until the end of this month.

A group of Oyster Bay shareholders had initially opposed the offer of $2.08c a share, saying the offered price was too low as the company's net tangible asset value was put at $4.86c a share when it released its annual results for the year to June 2010.

Oyster Bay owns or leases three large vineyards totalling 538 hectares in the Marlborough region, including the 257ha Oyster Bay vineyard.