Delegat's bid fair, says adviser

Delegat's Wine Estate's $6 a share offer for control of Oyster Bay Marlborough Vineyards represents a significant premium to the company's value and so is "fair", independent adviser Grant Samuel says.

In the Oyster Bay target company statement mailed to investors yesterday, Grant Samuel valued the company between $3.96 and $4.67 a share, using a capitalised earnings model.

The Delegat's offer represents a 54 per cent premium compared with Oyster Bay's $3.90 a share closing price on December 12 - the day before Delegat's made its offer.

Delegat's said last week that it had passed the minimum acceptance level in its offer for a 50.1 per cent stake.

Given that Delegat's is seeking only 50.1 per cent of Oyster Bay, investors who sell shares will retain 70 per cent of their initial holding after scaling.

For instance, a shareholder who bought 10,000 shares in Oyster Bay's 1999 initial public offering at $2 a share would receive $18,000 in cash for the sale of 3000 shares.

"They would have recovered 90 per cent of their initial investment by accepting," the document said.

Delegat's, Oyster Bay's largest shareholder, had a nearly 33 per cent stake before the takeover battle with Peter Yealands. An agreement was reached last December when Delegat's said it would offer $6 a share.