Foley Family Wines, majority owned by American businessman and vineyard owner Bill Foley, plans to make an all-scrip $1.9 million takeover offer for pinot noir pioneer Martinborough Vineyard Estates and has already secured agreements to buy 41 percent of the company.
Marlborough-based Foley Family Wines is offering one Foley share for every 27.95 shares in Martinborough Vineyard, it said in a statement. The offer will run from May 26 until June 24. The directors of Martinborough Vineyard recommend shareholders accept the offer and owners of 41.28 percent of the shares have already accepted under a pre-bid agreement, Foley Family Wines said.
The acquisition of Martinborough Vineyard would add to Foley's Te Kairanga Wines company, just down the road. Foley Family Wines, which controls about 364 hectares of land in Marlborough and Wairarapa, is betting the enlarged company's bigger scale will boost efficiency and improve profitability.
"Over the last decade, it has been challenging for small to medium sized winemaker such as Martinborough Vineyard Estates to trade profitably and deliver satisfactory returns to their shareholders and it is likely it will continue to be difficult for such companies without the benefits of scale and distribution," Foley Family Wines chairman Bill Foley said in a letter to Martinborough Vineyard shareholders.
"Our offer will enable the operations of Martinborough Vineyard Estates to continue within the larger Foley Family Wines family, and the offer enables shareholders to have an interest in a viable, well financed, publicly listed wine company," he said.
