Delegat's hopes new bid is palatable

Oyster Bay Director Jim Delegat addresses shareholders at the Oyster Bay AGM. Picture / Dean Purcell

Delegat's Wine Estate is to table a new $5-a-share bid for control of Oyster Bay Marlborough Vineyards.

The move reignites a bidding war between Delegat's and Peter Yealands - the NZAX-listed vineyard's first and second-largest shareholders.

The eight-month stoush for control of Oyster Bay got new legs last month when the Delegat's $4-a-share bid was cancelled by the High Court due to fundamental omissions in the Oyster Bay target company statement.

Jim Delegat, the winemaker's managing director, said yesterday that the new offer was "fair and solid".

When asked whether the company was prepared for another contest with Yealands, Delegat said shareholders had told him they wanted Delegat's in control of Oyster Bay.

Yealands has already stated publicly that he will offer $4.50 or more for the vineyards by Christmas.

"We are listening to shareholder sentiments. There is widespread support for Delegat's to ensure the vision and philosophy of Oyster Bay are seen through," Delegat said.

Delegat's offer values the vineyards at $45 million. It has about 33 per cent of Oyster Bay shares now.

At the heart of the failed takeover bid were two valuations of Oyster Bay. One pegged its value at $90 million, double the value in the target statement. The other valuation, based on more current data, showed Oyster Bay was worth $51 million.

At Oyster Bay's annual meeting in Auckland on Friday, shareholders voted to re-elect chairman Bill Falconer and directors Ross Keenan and Robert Wilton. David Rankin, Oyster Bay's third-biggest shareholder and a Yealands ally, did not succeed in his bid for a seat on the board.

Shareholders voted down two resolutions with regard to the company's 2004 grape harvest to Delegat's and the procedures in place to determine the price Delegat's should pay for its 2005 harvest.

The matters will be referred to market enforcer NZX Discipline, which may impose a fine on Oyster Bay.

Oyster Bay's bill for the takeover skirmish has hit $876,000, some of which will be recovered by the offerors.

Oyster Bay has deferred its 10c a share dividend until the takeover is complete.