Oyster Bay chairman says sorry for contravening code

Bill Falconer, chairman of Oyster Bay Marlborough Vineyards, told shareholders he regretted the omissions in the takeover document that ultimately crushed Delegat's Wine Estate's bid for the company.

Oyster Bay has been the subject of a takeover tussle between its two largest shareholders - Delegat's and Peter Yealands.

Last month, Delegat's $4 bid was cancelled by the High court due to fundamental omissions in the Oyster Bay target company statement, a document approved by its independent board headed by Falconer.

He told the Auckland meeting yesterday that no information was deliberately withheld from shareholders.

He said he regretted the omission that had caused the company "unnecessary legal costs ... and media attention that the company does not need". The tab is $876,000.

Last month, the High Court found the target statement failed to inform shareholders about the value of the company if it were free of its grape-selling contracts to Delegat's. This unencumbered value pegs Oyster Bay at $90 million, double the value in the statement.

A separate, even higher valuation, based on more current data, existed about a week before the statement was sent to shareholders. But it was not included in the document.

A handful of shareholders from the roughly 200 in attendance grilled the board on what one shareholder called "the cosy relationship" between Oyster Bay and Delegat's, its largest shareholder and biggest grape customer.

Third-largest shareholder David Rankin, who sided with Yealands, and was critical about the price Oyster Bay was getting from Delegat's, ran for a seat on the board.

One shareholder told the meeting: "The independent directors should have looked after minority shareholders. I fully support fresh blood in Rankin."

Falconer was up for re-election yesterday, along with directors Ross Keenan and Bob Wilton.

Jim Delegat, Oyster Bay director and managing director of Delegat's, reassured shareholders that his grape negotiations with Oyster Bay were fair and reasonable.

Shareholders for the first time were yesterday allowed to vote on the procedure Oyster Bay directors use to determine the price, and the actual price paid for the 2004 grape harvest.


The history:
* August: Delegat's obtains more than 50 per cent of acceptances from Oyster Bay shareholders and celebrates the takeover win.
* September: The Takeovers Panel rules Oyster Bay's directors had contravened the Takeovers Code by omitting material information from critical takeover documentation.
* November: The High Court rules the takeover should start again and cancels Delegat's offer.