Show and tell after wine bid sweetenedAndrew Trounson February...

Show and tell after wine bid sweetened
Andrew Trounson
February 19, 2007

TROUBLED West Australian wine company Evans & Tate wants NSW would-be acquirer Yarraman Winery to show it the money before it accepts an improved $148.3 million offer.
Late on Friday, US-registered Yarraman improved the enterprise value of its offer by $6.6 million, in what was a sweetener to E&T's main creditor, ANZ.
But while E&T said it was prepared to accept the offer, it wants Yarraman to detail where the money is coming from.

It then wants time to do its own due diligence on Yarraman's financing and forecasts.

The offer will also be subject to an independent valuation.

"In terms of the financial side (the value of the bid) we think it is looking pretty good, but now it will be subject to an independent valuation," E&T chairman John Hopkins said.

According to sources close to Yarraman, E&T's conditions aren't a deal breaker and it is expected to largely accept the conditions by today's deadline of midday Perth time, setting in train the acquisition process.

Yarraman's credibility has been questioned because it is listed on the relatively illiquid second-tier Over-The-Counter Bulletin Board in the US.

Last week it was late in filing its quarterly report, though it expects to remedy that this week.

While Yarraman is backed by several former executives from wine and spirits giant Allied Domecq, it has not yet fully detailed its funding.

However, it has lined up GE Commercial Finance to provide debt funding.

Under the conditions set by E&T, for the deal to proceed its due diligence must be completed by March 2. And Yarraman is required to sign a merger implementation agreement by March 16.

Regarding E&T's $90 million debt owed to ANZ, Yarraman is offering ANZ $80 million in cash but has now increased the equity component from $10.7 million to $17.3 million.

Yarraman's scrip offer for E&T remains at 1 Yarraman share for every 6.75 E&T shares held.

Under the deal, Yarraman is to list on the more credible American Exchange or Nasdaq Capital Market, as well as on the ASX's CHESS system.

http://www.theaustralian.news.com.au/story/0,20867,21246958-643,00.html